The world’s top financial policy makers this weekend launched a drive for new rules for

The world’s top financial policy makers this weekend launched a drive for new rules for “sovereign bankruptcy” to head off national debt crises and to handle them more smoothly when they did occur. This time the scheme has the unequivocal support of the United States, which previously had been sceptical.There had to be “a clear and predictable process for countries that reach a position in which they cannot sustain and service their debt burden”, Paul O’Neill, the US Treasury Secretary, said in his speech to the IMF governing board yesterday. The aim was “not to make defaults easier or more likely, but simply to make a restructuring more orderly and predictable should it occur”.The plan under development is far from popular with private-sector bank creditors of indebted countries. It provides for new rules making it harder for one or a few creditors to block restructuring schemes approved by the majority.

It is also proposed that countries hit by capital flight may declare “standstills” and temporarily halt debt repayments.Other provisions are the establishment of strict limits on IMF lending, and improvements in the fund’s surveillance and crisis prevention mechanisms.”Don’t throw stones at our best efforts to fix this system – throw ideas,” Mr O’Neill told major private bankers in a speech on Saturday evening. “We owe that to the people who have suffered from the chaos of the current system.”On the streets of Washington, anti-globalisation demonstrators were fewer than expected, with under 10,000 people turning out for the set-piece rally on Saturday. There were only half a dozen arrests.The growing consensus of policymakers on a concept for sovereign bankruptcy was the most hopeful part of talks otherwise dominated by worries over the faltering global economic recovery, debt turmoil in Argentina and Brazil, Japan’s debilitating financial sector crisis and the prospect of a new war with Iraq.IMF forecasters have scaled back their estimates of global growth this year and in 2003. With the recovery in the US losing steam, there is little sign that either Europe or Japan, the two other obvious locomotives, will be able to step in.Indeed, confusion reigned over Japan’s intentions for its sickly banking system, crippled with some $400bn (£256bn) of bad loans which have held the country in near recession for a decade. Within the space of 24 hours, Masajuro Shiokawa, Tokyo’s Finance Minister, three times changed his version of how the topic had been addressed in his bilateral meeting with Mr O’Neill – hardly an indication that decisive action will be forthcoming in the near future.Meanwhile, the world’s richest countries agreed to make good the $1bn shortfall in the HIPC fund for debt relief for the poorest countries But aid groups were unimpressed.. Aberdeen Asset Management, the company behind 19 beleaguered split-capital investment trusts, is mulling a cut to its dividend to try to preserve cash.

Aberdeen has also sacked four senior fund managers and is considering making further redundancies.Senior executives, including the chief executive, Martin Gilbert, will take salary cuts of up to a third and defer giant bonus payments for several years. Chris Fishwick, one of Aberdeen’s executive directors and a member of 10 Aberdeen-managed investment trust boards, was due to receive a pay-out of around £700,000 today, on top of a similar amount paid in shares earlier this year, but it is believed part of this will now be postponed.The company is not expected to announce plans for a dividend cut today, but it is understood to be considering the move before it announces full-year results in December.Analysts believe a cut would be a prudent move for Aberdeen, which paid 10.5p-a-share last year, making a total pay-out of £16m. The company did not increase its dividend at the interim stage, keeping it at 3.85p.Today’s trading statement comes after Aberdeen shares fell by more than a quarter last week and amid reports that retail investors have withdrawn more than £800m from its funds in three months. It is likely to say that, thanks to inflows to its fixed income and property funds and new fund management mandates from institutional investors, Aberdeen has seen a net inflow of funds.Aberdeen is likely to tell the market that overall its new business volumes have taken a further hit in the six months to September. This has been because of tough market conditions which have hit the revenues of almost all asset managers, but also because of the further deterioration of Aberdeen’s reputation following the split-cap d?cle.Split-cap trusts have two classes of shares, one attracting dividend income and the other benefiting from the capital growth of their investments. Their values have nose dived in the last 12 months because they are heavily geared and do particularly badly when markets fall.. Equitable Life, the stricken insurance company, yesterday moved to try head off another exodus of policyholders by insisting it remained solvent and dismissing suggestions it has drawn up secret plans for going into administration.

“Equitable Life has not drawn up any plan for administration,” Charles Thomson, chief executive, said. “Furthermore, it has no plan to appoint Deloitte & Touche or any other firm as administrator The society continues to meet its regulatory requirements. Equitable Life is and always has been solvent.”Equitable would be forced into administration if its investments were no longer enough to cover guaranteed pay-outs to its pensioners and savers. But the life insurer said that it had sold the bulk of its remaining holdings in equities, so its exposure to turbulent stock markets was now negligible.