World economies may suffer for years: SA Finance Minister
JOHANNESBURG (Reuters) – The impact of the global financial crisis will not disappear soon and may be felt by world economies for years to come, South African Finance Minister Trevor Manuel said on Monday.
The problems highlighted the need for stronger financial regulation and supervision to protect consumers and depositors, he added.
"We must be informed by the fact that these issues are not gong to disappear if the G20, over the next few months, finds the ways to keep the global economy afloat," Manuel told delegates at a conference on financial education.
Manuel took part in a meeting of leaders and finance ministers from the 20 leading industrial and developing nations in Washington over the weekend aimed at finding solutions to end a world banking crisis and to boost growth.
The meeting pledged fast action to rescue the global economy and set out plans to toughen oversight for major banks.
But markets continued to fall on more evidence major economies are in decline and on disappointment that the G20 did not produce concrete measures to avert a recession.
Japan on Monday became the latest big economy to fall into recession.
Manuel said banking systems must be informed by rationality and regulation must exist to limit the appetite for credit, while banks and other lenders must be held to account for reckless lending.
"Our financial sector in South Africa is working much better than most," he said.
South Africa’s financial sector has been largely cushioned from the banking crisis due to exchange controls that limited exposure abroad and because of relatively conservative lending practices.
The National Credit Act, introduced in 2007, guards against excessive lending.