Bahk urges bold, swift action to avert new crisis

WASHINGTON (Yonhap News) -- South Korea's top economic policymaker called Friday for advanced economies to take a more“aggressive, systematic and balanced” approach, based on strong political commitment, to improve fiscal conditions and avert a global financial crisis.

“A big worry now is that the current situation would not be just limited to a fiscal crisis in a couple of countries, but likely lead to a systemic risk to the overall global economy,” Minister of Strategy and Finance Bahk Jae-wan said in a statement.

He was attending the 66th annual meetings of the International Monetary Fund (IMF) and the World Bank (WB).

While the 2008 crisis stemmed from the private and financial sectors, he pointed out, the current challenges are mainly due to concerns about public finances in major economies.

“The market right now desperately calls for strong political commitment to push through fiscal austerity, policy capability to facilitate fiscal consolidation coupled with economic recovery, and the very right system to prevent the crisis contagion,”Bahk said.

He stressed that a "more aggressive, systematic and balanced approach is needed to ensure fiscal sustainability. Countries facing fiscal challenges need to come up with more concrete, substantive and implementable mid-and long-term fiscal consolidation plans.”

The minister urged countries with large economies to take into account how their fiscal and monetary policy would affect the stability of other countries.

“Make no mistake, we must address today's challenges boldly and swiftly with our greater political resolve of a spirit of union,”he said.

He added South Korea will do its best to “pre-emptively mitigate lingering risks” with stable macroeconomic policy.

This year's IMF and WB meetings follow Bahk's international debut as South Korea's top official in charge of economic policy.

He took office in June.

Bahk had a series of bilateral meetings with his U.S., Chinese, French, Japanese and Australian counterparts on the sidelines of the event.