President Barack Obama will unveil today plans for sweeping reform of US financial regulation, aimed at averting future crises like the banking meltdown that has plunged the global economy into recession.
The initiative comes as economic data continues to show the United States mired in its deepest downturn since the Great Depression, with only tentative signs of a recovery beginning to take hold.
Most Asian stock markets fell today, mirroring falls in US indexes overnight. Global stocks have rallied around 40 per cent from their March nadir on hopes that the world economy is past the worst of the slump, but now investors are pausing.
The worst economic slump in six decades was triggered by bank failures and market turmoil that followed big losses on risky home loans when a US housing boom turned sour in 2007.
The US government has been discussing for six months how best to tighten bank and market regulation in response to the crisis, with the European Union moving on a similar track.
Mr Obama will present his proposals at 4.50pm today, the White House said.
Data released yesterday from the US housing market, where the global financial crisis was born, showed construction of new homes rebounded in May.
But analysts said the figures, paired with news of a larger-than-expected drop in US industrial output, had yet to signal conclusively that any recovery was on the way.
Investors are seeking any sign that the worst of the global recession may be over, despite appeals for caution from officials who fear that markets will surge, only to dive again if the real economy fails to revive.
The MSCI index of Asia Pacific shares outside Japan fell 1.5 per cent and looked set for its fourth consecutive day of losses, while Japan's Nikkei was up marginally.
The US dollar was largely unchanged on the day against the euro and yen, after Brazil, Russia, India and China concluding their first summit together, issued a joint statement that did not mention any doubts about the dollar's role as the primary reserve currency.
The dollar had been under some pressure heading into the summit of the so-called BRIC nations on fears that Russia, which has publicly made clear it wants to have new world reserve currencies, would coax China into bashing the dollar together.
Instead, the world's biggest emerging economies issued a communique that demanded more power for developing nations in international financial institutions and the United Nations.
"We are committed to advance the reform of international financial institutions, so as to reflect changes in the world economy," the BRIC countries said.
"We also believe that there is a strong need for a stable, predictable and more diversified international monetary system."
Reuters