IMF warns storm clouds are gathering for next financial crisis
Source: The Guardian
IMF warns storm clouds are gathering for next financial crisis
David Lipton says world is unprepared for downturn and Fund needs more resources
Richard Partington
Tue 11 Dec 2018 10.59 GMT Last modified on Tue 11 Dec 2018 11.33 GMT
The storm clouds of the next global financial crisis are gathering despite the world financial system being unprepared for the next downturn, the deputy head of the International Monetary Fund has warned.
David Lipton, the first deputy managing director of the IMF, said that crisis prevention is incomplete more than a decade on from the last meltdown in the global banking system.
As we have put it, fix the roof while the sun shines. But like many of you, I see storm clouds building, and fear the work on crisis prevention is incomplete.
Lipton said individual nation states alone would lack the firepower to combat the next recession, while calling on governments to work together to tackle the issues that could spark another crash.
We ought to be concerned about the potency of monetary policy, he said of the ability of the US Federal Reserve and other central banks to cut interest rates to boost the economy in the event of another downturn, while also warning that high levels of government borrowing constrained their scope for cutting taxes and raising spending.
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Read more:
https://www.theguardian.com/business/2018/dec/11/imf-financial-crisis-david-lipton