* Risk of emerging market asset bubble, OECD chief says
* G20 central bankers pledged to take that into account
By Daniel Flynn
PARIS, Oct 25 (Reuters) - There is a risk of an asset bubble in emerging economies due to monetary easing in the developed world and a weekend meeting of G20 central bankers vowed to take this into account, the head of the OECD said in an interview.
Angel Gurria, secretary-general of the 33-member Organisation for Economic Co-operation and Development, said the OECD saw a possibility that rich nations' monetary stimulus to heal their economies could have a negative impact elsewhere.
"Yes, there is a risk," he told Reuters after attending a weekend meeting of G20 finance ministers and central bankers in South Korea. "Accommodative monetary policies in OECD countries are being exported to developing economies and that ... can create bubbles and can create distortions."
Gurria said the G20 talks in the historic Korean city of Gyeongju acknowledged it was legitimate for countries to act unilaterally in response to the multi-billion dollar capital flows heading toward developing nations due to this cheap money.
He said central bankers from industrialised nations, including the United States, also recognised the need to take capital flowsinto account when setting monetary policy.
"Everyone is now much more aware and much more cautious." said Gurria. "All the central banks said that they would ... try to take account of these spillover effects."
The G20 talks unexpectedly clinched a landmark deal to hand more voting power at the IMF to under-represented countries like China, India and Brazil and for member states to refrain from competitive devaluations. [ID:nTOE69M01A]
"This agreement is a great vote of confidence in the G20," said Gurria. "Not only did the G20 deliver on the immediate task to stabilise the world economy in 2008 after the collapse of Lehman Brothers, but it is now resolving other issues which have stubbornly resisted collective action for years."
G20 DEAL "WORK IN PROGRESS"
Some observers, however, expressed frustration that the meeting failed to agree on U.S. proposals to slap limits on the current account imbalances which underlie currency swings.
The final G20 communique committed to "maintaining current account imbalances at sustainable levels" and said that indicative guidelines would be agreed, without saying when.
"This agreement is a work in progress but ... the radar is now focused on this question of global imbalances in a way that it was not before," Gurria said. "People are going to be enormously careful to make sure they are not looking like they are overstepping the line."
British Economy Minister George Osborne said limits on trade imbalances were likely to be discussed at a G20 leaders' summit in Seoul next month, but he and others such as Canadian Finance Minister Jim Flaherty were cautious about whether a deal could be reached quickly.
Formed in 1999, in the wake of the turmoil in emerging markets following the East Asia crisis, the G20 gathers emerging and industrialised nations representing more than 80 percent of global output.
It replaced the G8 last year as the main forum for the world's major economies to resolve economic issues, as the global crisis brought home the need for broader consultation.
Gurria said it was unrealistic to expect a two-day ministerial meeting to reach agreement on an issue as complex as targeting trade imbalances, but he said the G20 had made a leap forward in the process of discussing such sensitive issues.
"There has been a very great improvement in the capacity to communicate within the group," said Gurria, a former Mexican finance minister and foreign minister. "There is a growing comfort zone which has been created to discuss some rather complex and uncomfortable issues." (Editing by Catherine Evans)