United Nations The U.N. chief warned Friday of global recession and a serious hit to emerging economies, calling for "drastic" measures to shore up banks and extend lines of credit to the world's poorest states.
Secretary-General Ban Ki-moon said the era of self-regulation among the biggest banks and other money-lending institutions had ended and pledged to support European and American efforts to rethink the global financial architecture.
He also called for all U.N. agency heads to cut 2 percent across-the-board from their budgets, saying it could not be business as usual.
"We agreed that we face the prospect of ongoing turmoil in the world's financial markets, coupled with a serious threat of global recession," Ban said. "Today's crisis will affect all countries. We fear the next shoe to drop will be emerging economies."
Ban spoke at a closed meeting with top U.N. agency heads, economic advisers and the heads of the World Bank and International Monetary Fund focusing primarily on the global financial crisis.
"The danger is a succession of cascading financial crises," Ban warned. "This demands drastic measures. The IMF and the world's central banks may need to set up substantial standby lines of credit for proactive intervention, so that banks in developing nations, too, have adequate funds to draw on in emergency."
The credit crisis engulfing nations from central Europe to Latin America and emerging markets ranging from Turkey to South Africa "compounds the food crisis, the energy crisis, the crisis of development in Africa," Ban said.