By IANS,
Washington : Vikram Pandit, the Indian-American chief executive of ailing banking giant Citigroup, has taken a swipe at recent efforts to prevent US banks that received government capital from hiring foreign workers, saying the new growth driver for US financial markets was Asia.
“It’s important that the most talented people in the world continue to believe that American companies are employers of choice,” he said stressing the importance of globalisation at a conference of business, economic and government leaders in Detroit Monday.
During the past few years, “US consumption and credit creation were the two main drivers of growth,” Vikram Pandit told the Detroit Economic Club’s National Summit. “The world needs new drivers of growth – and a new business model.”
One new growth driver for US financial markets is Asia, whose sustained growth requires a shift to domestic consumption, Pandit said. “It creates tremendous export markets for American countries,” he said. “We need unfettered access to these consumers and these markets.”
Despite the challenges, Pandit said past US economic downturns have created “breakthroughs” in new technologies and innovations, as well as venture capitalists who make investments.
“As we debate policies, we must take care that this model of growth is preserved,” he said. “It is America’s magic formula, but it is no longer America’s secret.”
The financial crisis, caused by insufficient savings and too much debt, has caused the US economy to lose steam. “Saving more will imply a lower growth rate for the economy,” Pandit said.
“De-leveraging the financial system implies lower credit creation … There is a clear linkage between credit creation and (gross domestic product) growth. Again, the implication is lower growth.”
Borrowers should accept a new world of tighter, more expensive credit as financial institutions recover from months of bad loans, failed banks and foreclosed homes, he said.
Pandit’s speech closed the first day of the three-day National Summit, which is expected to draw about 3,000 attendees to Detroit over three days. The goal of the summit is to craft a plan to keep the US competitive in manufacturing, energy, technology and the environment.