Malaysia slams global 'casino' principles
By Adie Suri Zulkefli Published: 2008/10/20
THE world financial system, which operates on the "casino" principles, must be changed to ensure stability in the international economy, thus allowing developing nations to implement their development programmes.
Second Finance Minister Tan Sri Nor Mohamed Yakcop said the casino principles have proven to only benefit a small circle of investors, while creating a huge damage to the affected nations.
Citing the 1997 Asian financial crisis, he said currency speculators made several billions of profit from the crisis, but the damage they created in the region was worth hundreds of billions.
Nor Mohamed said the current crisis in the US is motivated by greed and fear.
"The US economy makes so much profit from complex structured financial products created by their banks," he said in Tasek Gelugor, Penang, yesterday. "These products have no genuine value. However, due to greed, they invested heavily without knowing what they are paying for," he added.
He added that when things started to go wrong, the US realised that the wealth was just a worthless paper and their greed shifted into extreme fear.
Nor Mohamed said investors then started panic-selling and refused to invest even in those shares and projects that have genuine prospects and values.
"At this point, they are no longer rationale as they are motivated by fear and the economy begins to slip into recession," he said.
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