“Taking concrete measures will contribute to the global economy as well as Japan’s economy,” Nakagawa said after finance ministers and central bankers from the Group of Seven nations met in Rome Saturday.

The worst financial crisis since the Great Depression is deepening a recession in advanced economies and slowing growth in emerging nations. Developing economies in Asia will probably expand 5.5 percent this year, the slowest pace since 1998, the IMF said in an update of its World Economic Outlook report released last month.

Sharing risk

JBIC, working together with the Asian Development Bank (ADB) and the International Finance Cooperation, a member of the World

Bank, will share with commercial banks the risk of providing trade finance in developing nations, according to the statement.

Japan’s commitment to the new trade financing initiative follows a $2 billion contribution made through JBIC to IFC’s Bank Recapitalization Fund announced earlier this month.

“We would like to thank the Japanese government for their continued generous support for the World Bank Group’s economic crisis response,” World Bank President, Robert B. Zoellick said in a statement released Saturday.

“Japan’s initiative recognizes the important role that trade plays in an integrated world. Keeping trade flowing is vital to saving jobs and curbing the impact of the crisis on people in developing countries,” the statement said.

The global financial crisis has prompted banks around the world to reduce lending to emerging markets and cut trade finance lines to importers and exporters. This means essential goods cannot be imported, and presents a threat to the businesses of exporters in developing countries.

“The government of Japan’s trade finance facilitation initiative aiming particularly at the region is a clear demonstration of the cooperation that is required during these difficult times,” ADB President Haruhiko Kuroda said in a statement released Saturday.

Kuroda said the ADB is seeking to expand the size of its trade finance facilitation program from $150 million to $1 billion.

Source: Bloomberg