US credit rating downgrade to raise market risks — Purisima

The downgrade in the United States’ credit rating may heighten current uncertainties in financial markets and slow the global economy, the Philippine Finance Secretary Cesar Purisima said Saturday. Purisima, in a report on Reuters, pointed out the need for an alternative global reserve currency and more policy coordination among global regulators. “Global regulators will have to be more coordinated in their actions and this heightens the need for a new framework to facilitate this coordination," Purisima said in a mobile text message to reporters. “Unless the US addresses their fundamental issues, I think we may have entered an era of less predictable and less stable global financial markets," he also said. “This resulting unease may in the short-term make investors more tentative and slow down the global economy," according to Purisima. On Friday (Saturday in Manila), Standard and Poor's cut the US AAA credit rating over concerns about the government's budget deficits and rising debt burden. — JE, GMA News