IMF: global economy at just as much risk of crash as before crash.

September 26, 2012 Finance 

Guardian: “A Federal Reserve official’s scepticism about the US central bank’s efforts to stem the financial crisis alarmed Wall Street on Tuesday, as the International Monetary Fund warned that the global financial system remains as risky as it was before the credit crisis. US investors recorded their biggest sell-off in three months after Charles Prosser, hawkish president of the Fed’s Philadelphia branch, said the bank’s revival strategy, including $40bn a month of mortgage bond purchases, were unlikely to do much for economic growth or unemployment. In its twice-yearly Global Financial Stability Report, published on Tuesday, the IMF argues that despite a blizzard of new regulations the banking system is still vulnerable. …It urges global regulators to take a series of further measures, including monitoring “non-banks” such as hedge funds, and encouraging banks to offer simpler financial products. It also wants regulators to consider banning banks outright from certain risky activities – instead of hoping that tougher capital requirements will do the job, by making some areas more expensive and therefore less profitable.”

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