The Managing Director of the IMF, Christine Lagarde has warned politicans and policy makers from across the globe they must unite and take bold action to avoid a financial meltdown. Tough ecomomic decisions such as tax hikes must not be delayed for the sake of electoral expediency, she said.
Lagarde was making her first major speech as IMF chief in Washington.
“Exactly three years after the collapse of Lehman brothers the economic skies today look troubled, they look turbulent as global activity slows and down size risk increase and we have entered into a dangerous phase of the crisis.
‘The euro area debt crisis has worsened, financial strains are rising and again without collective bold action there is a real risk that the major economies slip back instead of moving forward,” she said.
One financial boost for the markets and investors came in advance of that speech as the European Central Bank announced it will, alongside other central banks, lend dollars to euro zone banks in three separate three-month loans to ensure they have enough of the US currency through to the end of the year.
Euro zone banks soared almost over 6.5 per cent on the back of the news with troubled French bank, BNP up over 13 per cent.