From the article: "The actions of the Western governments appear to be have influenced also by the high oil prices."

In much of last year's analysis, there was a strong general sense that if rollover failures were to create problems throughout each sector of the oil industry, the precise date-related causes of those failures would likely be too complex (and too hidden) to map accurately, and that no single business interest or regulatory body would be blamed. Notwithstanding, G-7 finance ministers now see high oil prices as their "chief concern".

[Fair use, etc.]

New York Times, 22 September 2000

Major Central Banks Step In to Shore Up the Ailing Euro

By JULIAN E. BARNES

The world's most powerful central banks stepped in today to bolster the sliding euro, saying they were acting to prevent a global economic downturn.

The coordinated action by the Federal Reserve and the Canadian, Japanese, British and various other European central banks was not widely expected among currency traders in the world markets. But worries that a weak euro could derail the world economy, overcame American reluctance to intervene and led to the joint action, officials said.

The Federal Reserve and other central banks announced their intervention this morning. United States Treasury officials instructed the Federal Reserve on Thursday to sell dollars and buy euros, but Treasury Secretary Lawrence Summers did not provide details of the size of the intervention.

In a news conference this morning, Mr. Summers said the United States acted because the weak euro threatened the stability of the world economy.

The United States last intervened to prop up a foreign currency in 1998, when the Treasury and Federal Reserve worked to to end a slump in the Japanese yen during the midst of the Asian financial crisis.

Traders had discounted the possibility of intervention by the United States because of Mr. Summers belief in a strong dollar. The strength of the dollar against other currencies has helped keep inflation low by keeping the price of imports down.

Mr. Summers said today that he had not changed his views, despite the intervention.

``As I have said many times, a strong dollar is in the national interest of the United States,'' he said.

Nevertheless growing concern that a weak euro could cause a global economic slump and therefore erode the benefits of a strong dollar, Mr. Summers suggested in his remarks.

The intervention by the Federal Reserve and the other central bankers pushed the euro up four cents, or 5 percent, to just above $0.90, although after the initial bounce the currency dropped to $0.89.

In a statement released this morning the Federal Reserve said the bank acted because of a "shared concern about the potential implication of recent movements in the euro for the world economy."

The euro is the common currency for 11 members of the European Union. Although the euro trades on financial markets and is used for business transactions, euro paper notes and coins do not yet circulate.

The euro began trading in January 1999 at $1.17, but it has steadily lost value against the dollar, hitting a low this week of $0.85. The plunge has worried Europeans and undermined faith in the new currency, and made nations considering joining the common currency wary of joining the move.

The actions of the Western governments appear to be have influenced also by the high oil prices. Mr. Summers had said he was opposed to releasing oil from the Strategic Petroleum Reserve. President Clinton is under pressure from Vice President Al Gore who has endorsed releasing oil from the reserve to prevent home-heating oil prices from rising too sharply this winter.

But today Mr. Summers' comments implied that he was open to some sort of intervention in the energy markets by the White House.

``More stable prices in line with historic norms are in the mutual interest of both oil producing nations and consumers,'' he said.

The intervention by the Western central banks came a day before the finance minters of the G-7 nations are to meet in Prague. The high oil prices are expected to be the chief concern among the finance ministers.

-- Anonymous, September 22, 2000