World’s power must act quickly as global economic crisis grows: IMF

Thursday, October 11, 2012
IMF urges world leaders to take immediate action to combat
growing risk to global economic stability [Image: UNiffed]    
Tokoy: International Monetary Fund Managing Director Christine Lagarde on Thursday urged world leaders to quickly confront growing risks to global economic stability.

"We expect action. And, we expect courageous and cooperative action on the part of our members," said Lagarde as the 188-member institution opens its annual meetings. The International Monetary Fund and World Bank Group are meeting in Tokyo this week.

Risks to global financial stability have increased and financial markets have been volatile as European policymakers grapple with the ongoing crisis, the IMF said in its latest Global Financial Stability Report, issued this week in Tokyo.

Faltering market confidence has led to capital flight from countries on the periphery to the core of the euro area. This has meant higher borrowing costs for countries on the periphery.

Lagarde said that financial leaders will seek to reinforce the recovery of the world economy.

 "And we really want to, together with our members go through what needs to be done, what action needs to be taken in order to make sure that recovery is not just a little bounce, but is really here for the longer term and is sustainable," Lagarde said.

 Lagarde also praised a recent initiative to strengthen the finances of the Poverty Reduction and Growth Trust (PRGT), the IMF's concessional lending vehicle that lends to poor countries.

The fund plans to distribute $2.7 billion in windfall profits from 2009-2010 gold sales to the PRGT. IMF officials have said the added funding will bolster the PRGT's lending to poor nations.
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