The world's finance ministers are trying to reach agreement on ways of stabilising the increasingly threatened international monetary system.
1. Mexico City, September, 1982: TVs Vast cheering crowds waving banner (3 shots) 0.09
2. CU PULL BACK TO GV President Jose Lopez Portillo and other officials on balcony 0.13
3. SV Money changing hands in Mexican bank 0.18
4. New York, August, 1982: SVs Bankers leaving Federal Reserve Bank - SV banker answering questions at press conference (5 shots) 0.40
5. Mexico City, August, 1982: TS AND SVS Mexicans at money exchange (4 shots) 0.50
6. New York, September, 1982: GVs American Stock Exchange -- GV gold bidding at Commodity Exchange (4 shots) 1.04
7. South Africa: CU Gold ingot - SV molten gold poured into mould - SVs Krugerrand blanks being punched from sheet gold - minted coins falling into collecting bowl -- SVs and GV gold ingots stacked in vault (9 shots) 1.40
8. London, 1979: GV Guildhall - SV INTERIORS London Bullion Market and brokers doing business (4 shots) 1.54
9. Hong Kong: GVs INTERIOR Gold Exchange Market - brokers bidding and selling 2.06
10. Warsaw, May, 1982: GV PAN Compound of cars being viewed - SV people looking at cars - CU price label on car (3 shots) 2.25
11. GVs and SVs Stalls in bazaar selling books, antiques, hi-fi equipment and clothes (4 shots) 2.34
12. Argentina, 1982: GVs Meat being loaded onto ship in Buenos Aires - dock workers standing around - empty and derelict factories (5 shots) 2.51
13. Argentina, 1982: People buying fruit, meat and fish (5 shots) 3.04
14. Paris, 1982: SV INTERIOR People looking for work of job centre (3 shots) 3.11
15. Philadelphia, USA: GVs and PAN Philadelphia skyline - derelict factories (3 shots) 3.17
16. West Germany: CU jobs being advertised in newspaper (5 shots) 3.22
17. Frankfurt, West Germany, 1982: SV & GV Telefunken building - SCU Newspaper headlines tell of collapse (6 shots) 3.37
18. Yugoslavia, 1979: President of International Monetary Fund Robert McNamara speaking and delegates listening (2 shots) 4.01
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Background: VARIOUS LOCATIONS
The world's finance ministers are trying to reach agreement on ways of stabilising the increasingly threatened international monetary system. The 37th annual meeting of the World Bank and the International Monetary Fund (IMF) opened in Toronto on Monday (6 September). The problems facing the ministers are the most formidable since the 1930s. On the agenda are issues are diverse as the inflated role of the dollar, the worsening plight of poor nations and the adequacy of the West's present economic policy. And there will be talks on ways to increase borrowing rights for developing countries like Mexico which face serious financial difficulties.
SYNOPSIS: Mexico City, and a rally organised on September 3 to support President Portillo's nationalisation of private banks. His intention is to keep Mexicans from taking cash out of the country. There has been a big loss of confidence in the peso, a currency devalued three times in one year.
At a recent meeting of New York's Federal Reserve Bank, a group of international bankers agreed to give Mexico more time to pay back debts totalling ten billion dollars. This followed an assurance from the nation's Foreign Minister that interest payments would be paid. Economist say Mexico's financial crisis was brought on this summer by falling oil prices and the fact that it spends more than it receives from its export revenue.
On September 3, share prices on the London and New York stock exchanges were soaring to record levels -- a reaction to the growing belief that America will be forced to cut interest rates to halt the worsening financial plight of many countries.
Gold hit its biggest price level for twelve months following the Portillo government's nationalisation of Mexican banks. The price of the precious metal began to rise late on September 2 in New York and continued to increase as different world markets opened for trading.. On the city's Commodity Exchange, gold jumped to 458 dollars an ounce. In London, the price of the bullion rose to 455 dollars -- an increase of about 47 dollars an ounce.
In gold trading rooms there were orders to purchase from client all over the world -- a buying spree said to reflect growing fears about problems in international banking, It is now three years since gold experienced its most dramatic price rises. By the 1979, it had risen by 290 dollars. Less than ten years before that, gold was held at n official 35 dollars an ounce.
The crisis in Poland and, in particular, its financial implications have been of increasing concern to Western bankers. Encouraged by their governments, they have lent more than 16 billion dollars to the Poles. Warsaw has made it clear that its economy is unable to earn enough hard currency to meet overdue interest payments. And it is certainly not able to pay off commitments of over 10 billion dollars due in 1982.
Argentina is another financial casualty to be considered by the International Monetary Fund. The nation is unable to meet interest and principal repayments on its international debt. Its position is made more difficult by the continuing economic sanctions imposed by Britain after the Falklands conflict. These includes the freezing of six-hundred million dollars of Argentine assets in London. It is thought that Argentina will follow Mexico in seeking an emergency loan from the IMF.
Not since the Great Depression of the 1930s has a recession had such a global reach. These young people in France have joined the 22 million unemployed in Western Europe and the U.S. In the United States and West Germany the economic slump has probably been felt the hardest if only because of the sharp contrast with periods of relative affluence. But the news that the West German electronics giant AEC-Telefunken had gone into receivership shocked the world. It was the biggest company failure in European post-war history.
The problems of international debt are likely to be a main topic at the IMF annual meeting... Economists feel that only greatly reduced U.S. interest rates can deflect the possibility of a collapse of the international banking system. Lower interest rates would cut the cost of external debts for the developing world and may be the only remedy to stimulate the world economy.
Source: REUTERS LIBRARY AND THE NATIONAL BROADCASTING COMPANY INCORPORATED