A look at economic developments around the globe

AP News
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Posted: Sep 21, 2011 12:52 PM
A look at economic developments around the globe

A look at economic developments and activity in major stock markets around the world Wednesday:

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WASHINGTON _ The International Monetary Fund says the global financial system faces more challenges than at any point since the 2008 financial crisis.

Europe's debt crisis is spreading to its banks, which hold government debt and may be forced to pull back on lending to conserve cash, the lending organization said.

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ATHENS, Greece _ Greece will have to take fresh austerity measures, the debt-ridden country's finance minister said, a day after Athens moved a step closer to getting the vital bailout funds it needs to avoid a disastrous default next month.

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FRANKFURT, Germany _ The European Central Bank says it loaned $500 million to a single bank for seven days, raising further fears that a major financial institution could be in trouble.

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LONDON _ Investors were reluctant to buy up stocks as they waited to hear if the U.S. Federal Reserve would move to stimulate the U.S. economy and if Greece's creditors would continue to prop up the struggling country.

In Europe, Germany's DAX closed 2.5 percent lower, while France's CAC-40 fell 1.5 percent. Britain's FTSE 100 bucked the trend, moving up 2 percent.

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TOYKO _ In Asia, South Korea's Kospi gained 0.9 percent and Australia's S&P/ASX 200 rose 0.8 percent. But Hong Kong's Hang Seng dropped 1 percent.

Mainland Chinese shares saw their biggest advance so far this month, after the IMF report said growth would be a robust 9.5 percent this year and 9 percent next year. The benchmark Shanghai Composite Index gained 2.7 percent. The Shenzhen Composite Index gained 2.9 percent.

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LONDON _ The Bank of England appears to be gearing up to pump billions more into the British economy to stimulate a faltering recovery, minutes to its last rate-setting meeting suggested.

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TOKYO _ Japanese exports rose for the first time in six months, inching up 2.8 percent in August from a year earlier, the Finance Ministry said, a sign of recovery from the March 11 earthquake and tsunami disasters.

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BEIJING _ China said that tariffs it imposed on imports of U.S. chicken last year are legal, after the United States filed a complaint with the World Trade Organization saying Beijing violated international trade rules.

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LISBON, Portugal _ Portugal raised $1.71 billion in two short-term debt auctions with interest rates reflecting simmering market unease over the eurozone sovereign debt crisis.

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LJUBLJANA, Slovenia _ Slovenia's toppled government pledged to keep working on ratifying a key European Union bailout fund for debt-strapped eurozone nations.

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MADRID _ Teachers in Madrid stayed off the job in large numbers on the second day of a strike over staff cuts, and colleagues in the northwestern region of Galicia joined them.

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