‘Financial crisis is worst I’ve seen’ says Wolfensohn

Oct 1 2008 by Alistair Houghton, Liverpool Daily Post

FORMER World Bank president and leading international financier James D. Wolfensohn has told the Daily Post the world is suffering the biggest financial crisis he has seen in his lifetime.

Mr Wolfensohn, 74, who will address the annual Liverpool and District Institute of Financial Services dinner on October 30, says he believes the credit crunch is far from over. He said: “My own view is that we’re not through the worst yet. Every day we see something occurring.

“We’ve had the first rush of crises in the US. It’s spreading – you’ve had your own difficulties in the UK and Europe is beginning to feel it.

“There’s very little doubt this thing will spread. The whole framework of banking has been changed for many years to come.

“Without being a Cassandra, you have to say we’re in very difficult times.”

Mr Wolfensohn served as president of the World Bank, which provides funding to reduce poverty in the developing world, from 1995 to 2005.

Today Mr Wolfensohn, a member of the 1956 Australian Olympic fencing team, is chairman of New York private investment firm Wolfensohn & Company and an advisor to Citigroup.

He is concerned that as Western countries strive to deal with the credit crunch, the needs of the developing world could be forgotten.

He said: “Individuals look at their own house first and their own community first and then start thinking more broadly. So it is with politicians, as you can see if you look at the current presidential debates or at Gordon Brown.

“He’s fighting for survival and the stability of the British system.”

Mr Wolfensohn said developing countries had been hit by a “double whammy” as slowing international trade mean they also had less money to invest in infrastructuree.

Tickets for the Liverpool & District Institute of Financial Services’ annual dinner available on 0151 224 2000.