Aug 28, 2011
JACKSON HOLE, Wyo – The new head of the IMF on Saturday urged global policymakers to pursue urgent action, including forcing European banks to bulk up their capital, to prevent a descent into a renewed world recession.
“Developments this summer have indicated we are in a dangerous new phase,” International Monetary Fund Managing Director Christine Lagarde said on Saturday at an annual conference hosted by the Kansas City Federal Reserve Bank.
“The stakes are clear; we risk seeing the fragile recovery derailed. So we must act now,” she said.
Two years after the end of the worst of the financial crisis, growth in the United States and Europe is sputtering as debt burdens rise. Volatility in financial markets has intensified strains on banks, further undercutting the meager global recovery.
Policymaker indecision on both sides of the Atlantic has shaken public confidence.