Brazilian President Luiz Inacio Lula da Silva on Monday compared investment funds he said were responsible for US subprime mortgage woes to "gamblers" and urged Washington to act to avert a global crisis.
During a visit to Helsinki kicking off a five-day Nordic tour, Lula denounced "the greed in certain investment funds that ... used subprime rates imagining they were living in a casino situation."
Subprime rates were made widely available to US home buyers with patchy credit histories and who are now having trouble repaying their loans. He urged the United States to act quickly to prevent emerging economies from being dragged down by the impact of US mortgage defaults, which have raised fears of a corporate credit squeeze and a general slowdown in broader US economic momentum. "We expect that the US will resolve this issue because, after all, who created the bill for financing? It was the American government," he said.
He also called on other countries to assume their share of responsibility. "It's necessary that the central banks of stakeholder countries involved ... as urgently as possible show they assume the responsibility to resolve the crisis," he said.
The fallout from subprime mortgage problems should not "cause damages to many countries that like Brazil stayed decades without growth in their economies." "We don't want to miss this opportunity because of those people that were just betting, players that are gambling and want to earn easy money instead of doing hard work to earn it," Lula said.