Wednesday, 24 August 2011 10:43
CANBERRA - The world economy is on the brink of another economic crisis, Australia and New Zealand Banking (ANZ) chief executive Mike Smith recently.
Smith said policy makers in Europe and the U.S. have failed to show leadership in dealing with massive debt problems, and risk causing serious financial and social pain around the world if the trend continues.
"Europe is frankly a mess," he said while delivering a trading update for ANZ on Friday, quoted by The Australian newspaper.
"And the United States, which I'm normally much more optimistic about, we've seen a crisis which was created by the partisan nature of its current politics.
"That's created further concern to what was already a pretty fragile recovery."
On Friday morning, shares in ANZ fell as much as 5.6 percent, following sharp falls in European and U.S. stock markets due to fears that global economic growth could slow sharply.
Smith said that the significant falls on world equity markets, which continued on Thursday night and locally on Friday morning, showed investors were concerned about weaker economic growth being a reality for most advanced economies.
"Further mis-steps from European and US policymakers risk converting the cracks in their economies into a much deeper global system crisis which would have worrying economic and social consequences," he warned.
But Smith, whose bank is focusing on Asia to drive profit growth, remains optimistic for the outlook in the Asia-Pacific region.
He said that the fact is that Australia is incredibly well positioned because of the nation's linkage to Asia, which remains the best performing part of the global economy.
His comments came after ANZ reported a 1.45 billion U.S. dollars underlying profit for the June quarter, up 1.3 percent compared to the March quarter. (PNA/Xinhua)
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