[Weekly Compilation of Presidential Documents Volume 34, Number 41 (Monday, October 12, 1998)]
[Pages 1978-1979]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to Finance Ministers and Central Bank Governors

October 5, 1998

    The President. First of all, let me welcome all of you here to the 
United States. It is a great honor for us to host this terribly 
important meeting.
    Three weeks ago, at the Council on Foreign Relations in New York, I 
asked Secretary Rubin and Chairman Greenspan to call together their 
counterparts from key emerging and industrial economies to discuss ways 
of building a new financial architecture for the 21st century and to 
also evaluate the specific measures that we should take together to deal 
with the current crisis. And I offered some ideas of my own on that day.
    We began these discussions on reforming the international financial 
architecture at the G-7 meeting in Naples back in 1994. It seems like a 
century ago, when you think of how quickly the world has changed since 
then. In Halifax, in 1995, the G-7 followed up with the establishment of 
the special data dissemination standard, the IMF supplemental reserve 
facility, the new arrangements to borrow.
    But clearly this is not just a task for the G-7 alone. This is an 
issue which, as we see, affects every nation in the world. That is why 
last year, when the APEC leaders met in Vancouver, we called for a 
process that permitted the world's leading economies and the world's 
emerging economies to work together. And this effort began in April of 
this year.
    The expansion of international markets and the growth of the global 
economy over the past 50 years has helped to lift millions and millions 
of people out of poverty; it has raised living standards for millions 
more. But as we see, the fast-paced, high-volume global capital markets 
also can react swiftly and harshly when countries stray from sound 
policies. And the markets also can overreact, subjecting even countries 
following good policies to severe pressures.
    When the tides of global finance turn against a country, the human 
costs can be great. This weekend you've held important talks on the 
immediate steps we can take to limit the present financial crisis. And I 
was pleased to hear that both the G-7 and the IMF interim committee have 
agreed to look at ways of strengthening our capacity for stability by 
establishing a new precautionary financial facility to help countries 
ward off financial contagion. Every leading industrial economy has a 
role to play, including the United States, by securing full support for 
IMF funding, Japan, by moving quickly to address its economic and 
financial challenges.
    Tonight's meeting is an opportunity for us to look at not only the 
immediate crisis but to look further into the future. We must ensure 
that the international financial architecture is prepared for the new 
challenges of our time, especially the challenge of building a system 
that will lessen and manage the risks in the global market to allow 
countries to reap the benefits of free-flowing capital in a way that is 
safe and sustainable. I think this is imperative if we are to maintain 
global support among ordinary citizens for free markets and ultimately 
for free governments.
    We must find ways that do not penalize those nations who follow 
strong economic policies in times of crisis that will minimize the 
frequency, severity, and human cost of the financial crisis, that will 
put in place social structures to protect the most defenseless, and that 
will promote broad democratic support, which is necessary for economic 
change.
    You are doing important work, perhaps the most important work the 
world can be doing at this moment in history. The institutional reforms 
that flow from all this work will shape the global financial system for 
the next half-century. The way we move forward using our work here 
tonight will help to determine the course of our children's future. We 
must do whatever it takes to build them a future of stable and sustained 
progress and limitless opportunity.
    I am convinced that, as formidable as the challenges may seem, it is 
well within our grasp if we determine to do what it takes.
    Thank you very much.

[At this point, Treasury Secretary Robert Rubin made brief remarks on 
how the meeting should proceed.]

[[Page 1979]]

    The President. Let me say, from my perspective, two things would be 
especially helpful to hear from all of you: First of all, briefly, what 
you think the causes of the present predicament are; and secondly, what 
you believe we should do, not only in the immediate present but over the 
long run with the architecture of the financial system. And insofar as 
there are new ideas to be advanced, I think we owe it to ourselves to 
say not only what the potential positive impacts are but whatever 
potential negative consequences might flow from the changes that we 
advocate.
    And I would like to just suggest--if they're willing, I'd like to 
ask the head of the Mexican central bank, Mr. Ortiz, to begin; and 
perhaps Gordon Brown, the Chancellor of the Exchequer, would follow; and 
then, perhaps Minister of Finance Tharin from Thailand. And after those 
three talk, then we'll just open the floor and have a free-ranging 
discussion.

Note: The President spoke at 5:31 p.m. in the ballroom at the Sheraton 
Luxury Collection Hotel. In his remarks, he referred to Guillermo Ortiz, 
Governor, Bank of Mexico; Chancellor of the Exchequer Gordon Brown of 
the United Kingdom; and Minister of Finance Tharin Nimmanhemin of 
Thailand. The transcript made available by the Office of the Press 
Secretary also included the remarks of Treasury Secretary Robert Rubin.