IMF official says worst is over for financial sector
The worst of the financial sector crisis is over although the impact on the broader economy will likely drag on in coming months, IMF managing director Dominique Strauss-Kahn said yesterday.
Economic growth has lost pace in most major economies recently in the wake of a slump in the US housing market, which has triggered extreme financial market volatility and reluctance among banks to make all but the safest loans.
After months of nerve-wracking swings in financial markets, optimism has begun to emerge among market participants that the worst of the storm has blown over since the collapse of the US investment bank Bear Stearns in the middle of March.
While past financial crises tended to be triggered by problems in developing countries, often with current account經常帳 problems, Strauss-Kahn warned that in the long term the recent turmoil混亂would likely be “a taste of the new kind of crisis 轉機that we are going to face.”
With big developed economies such as the US and Europe slowing following the turmoil, Strauss-Kahn said that emerging countries would be the biggest motors behind world economic growth this year.
Nevertheless, he insisted that such fast-growing economies would also eventually feel the impact of the slowdown in rich countries, although perhaps with “some delay.”
“In no way is there some sort decoupling” between economic growth trends in developed countries and emerging economies, he said, weighing into one of the hottest debates currently in economics.