The head of the International Monetary Fund on Thursday urged a global focus in 2010 on reforming financial regulation in order to help prevent a repeat of the failures that caused the financial crisis.
IMF Managing Director Dominique Strauss-Kahn, in his first news conference of the year, said financial sector regulations and oversight need to be stronger and smarter. Without necessary changes, he said, the financial sector could go back to business as usual and lessons from the crisis would be cast aside.
"It means we should complete the global project to address the failings in regulation, economic policy and governance that lay behind this crisis," Strauss-Kahn said.
"The question is not to add layers of regulation one over the other one, but to have regulations that really help avoid crisis of this kind," he said, noting that the changes would require political support.
He applauded plans by the Obama administration to apply a levy against major U.S. financial institutions to cover the cost of the government's bailout for banks.
"I really celebrate this proposal by the U.S. government because it shows the political momentum to move in this direction is still there," he said.
Turning to the world economy, Strauss-Kahn suggested the IMF would announce more upbeat economic forecasts in its World Economic Outlook later this month, including for Europe, although he warned that the recovery worldwide remains very fragile and mainly driven by government support.
The world is in the midst of a jobs crisis, with the worst was yet to come, he said, as he urged governments to take the jobs situation seriously and shift stimulus toward supporting employment.
The world, and the IMF, could not declare the crisis over until the employment crisis was under control, he said.
Source: ReutersCourtesy moneycontrol.com
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