Statement by the ICC Secretary General, Guy Sebban

ICC is deeply concerned about the current crisis in the global financial system which has led to a severe contraction of credit and dramatic falls last week in stock markets around the world. The prospects for global economic growth in 2009 have already been badly damaged, with North America and Europe facing a prolonged period of recession.

After a hesitant and divided initial reaction to the crisis, governments and central banks in several key countries have now taken welcome steps in coordination to reduce interest rates, help recapitalize major banks, and get credit flowing more normally again. Restoring confidence in the banking system as rapidly as possible to limit the adverse impact on the real economy is the first priority today. All efforts must be focussed on preventing the financial crisis from doing serious harm to other sectors of business activity, with potentially devastating impacts on economic growth, incomes and jobs.

It is vital that governments demonstrate and sustain unity at this critical stage. Only a coordinated and coherent approach can restore confidence in the financial markets. In finance as in so many other areas in today’s interdependent world economy, ICC cannot overstate the crucial importance of international cooperation to tackle major challenges which transcend national boundaries, and which governments are increasingly unable to resolve on their own.

It is clear that the crisis is the consequence of the bursting of the biggest housing and credit bubble in history. Serious mistakes were made by both the private and public sectors, leading to a disastrous mispricing of risk and a growing disconnection between the financial and economic spheres. Unwinding the huge distortions created by this will take time and will inevitably require painful adjustments. Governments, working together, must provide strong and clear leadership to ensure that the adjustment process is orderly and that the adverse impact on the real economy is kept to a minimum.

Beyond the immediate challenges, governments will be looking to draw lessons from this cataclysmic financial crisis with a view to designing effective regulatory and supervisory frameworks for financial markets in a complex and rapidly-evolving global economy. That task will be equally complex, and challenging. With its thousands of member companies from all sectors and in all parts of the world, ICC looks forward to contributing its extensive knowledge of today's global economy to that endeavour.