Bloomberg has reported that Yu Yongding, a former adviser to China's central bank, has said that the failure of US mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system.
"If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic,'' Yu said in e-mailed answers to questions yesterday. "If it is not the end of the world, it is the end of the current international financial system.''
"The seriousness of such failures could be beyond the stretch of people's imagination,'' said Yu, a professor at the Institute of World Economics & Politics at the Chinese Academy of Social Sciences in Beijing. Yu is "influential'' among government officials and investors and has discussed economic issues with Premier Wen Jiabao this year......
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starker tobak.........