Representatives from 24 central banks and monetary authorities
including the US Federal Reserve and European Central Bank landed
in Sydney to meet tomorrow at a secret location, the Herald
Sun reports.
Organised by the Bank for International Settlements last year,
the two-day talks are shrouded in secrecy with high-level security
believed to have been invoked by law enforcement agencies.
Speculation that the chairman of the US Federal Reserve, Dr Ben
Bernanke, would make an appearance could not be confirmed last
night.
The event will be dominated by Asian delegations and is expected
to include governors of the Peoples Bank of China, the Bank of
Japan and the Reserve Bank of India.
The arrival of the high-powered gathering coincided with a fresh
meltdown on world sharemarkets, sparked by renewed concerns about
global growth and sovereign debt.
Fears countries including Greece, Portugal, Spain and Dubai
could default on debt repayments combined with disappointing US
jobs data to spook investors.
Australia's ASX 200 slumped 2.4 per cent, to a its lowest close
since November 5, echoing a sharp fall on Wall Street.
Asian share markets were also pummelled, with Japan's Nikkei 225
down almost 3 per cent and Hong Kong's Hang Seng slumping 3.3 per
cent.
The damage was also being felt by European markets last night
with London's FTSE 100 down sagging 1 per cent in early trade.
Sovereign debt fears rippled through to the Australian dollar
which was hammered to a four-month low of US86.43 and was trading
at US86.77 cents last night.
"This does feel like '08 and '07 all over again whereby we had
these sort of little fires pop up and they are supposedly contained
but in reality they are not quite contained,'' said H3 Global
Advisors chief executive Andrew Kaleel.
"Dubai should have been an isolated incident and now we are
seeing issues with Greece, Portugal and Spain.''
It wasn't all bad news with the RBA yesterday upping its
Australian growth forecasts and flagging more interest rate rises
this year.
The central bank estimates the economy grew 2 per cent in 2009,
and will expand by 3.25 per cent in 2010, and by 3.5 per cent in
2011.
The outlook for global growth is likely to be a key theme of the
high level central bank talks.
The gathering also comes at an important time for the BIS as it
initiates an overhaul of the global banking system which will
include new capital rules applying to banks and more stringent
standards regulating executive pay.
A key part of the two-day talkfest will be a special meeting of
Asian central bankers chaired by the governor of the Central Bank
of Malaysia, Dr Zeti Akhtar Aziz.
Influential BIS general manager Jaime Caruana is also expected
to take a prominent role in the talks.