Global Economy Has Entered 'Dangerous New Phase,' IMF Chief Warns
"We are certainly living through times of great economic anxiety," International Monetary Fund Managing Director Christine Lagarde said this morning.
"Exactly three years after the collapse of Lehman Brothers," she cautioned in a Washington, D.C., speech, "the economic skies look troubled and turbulent as global activity slows and downside risks increase."
And now, Lagarde warned, "we have entered a dangerous new phase of the crisis. Without collective resolve, the confidence that the world so badly needs will not return."
She urged "leadership over brinksmanship, cooperation over competition, action over reaction," in confronting the global economy's problems. "Policymakers must ... act together," she said. "They must reclaim the spirit of 2008, or the spirit of 1944. The Wilsonian spirit — the belief that the whole is greater than the sum of its parts."
Lagarde called for coordinated action by the world's leading nations to "repair, rebalance, reform [and] rebuild" global financial systems.
As she spoke, The Associated Press reports, stocks were rising because of announcements by central banks in Europe and the U.S. that "they would provide European banks with dollars in three loan installments.
Lagarde, formerly the French finance minister, took over the top post at the IMF this summer following the resignation of Dominique Strauss-Kahn.