Sri Lanka should watch external developments, learn lessons: banker

Mar 17, 2012 (LBO) – Sri Lanka should watch global developments closely, in particular the unfolding scenario in Europe and learn lessons, Saliya Rajakaruna, chief executive of the Nations Trust Bank has said.

Rajakaruna said the US economy was still struggling, the future of the Euro single currency was in doubt, the Middle East was in turmoil and Even India and China was beginning to slow down and showing signs of stress.

Global red lights

“Among the many issues so confronting the global economy, the European debt crisis remains the most intractable threatening to engulf other geographies,” he told shareholders in the bank’s annual report.

“Debt has been an important driver of the European economies. Over the years their private sectors, households and governments borrowed heavily to finance growth
and remain significantly leveraged.

“The mis-match, particularly of public finances and resulting sovereign borrowings, has now
transferred to the financial system threatening their banks and perhaps those in other countries.”

He warned that growing austerity measures in many counties may impact Sri Lanka and the island had to learn the lessons of credit and rely less on c