Market Correction
The head of the IMF Rodrigo Rato warned leaders of the world's major economic powers at at meeting on the weekend "to correct global imbalances if they want to avoid a disruptive market correction."
Rato said "the global financial system was out of kilter because of the huge US current account deficit, weak growth in Europe and Japan, the low savings rate of US consumers and inflexible currency regimes in Asia."
"If policies do not adapt, do not change to react to these imbalances, we run the risk of an abrupt correction of the markets ... (when) confidence for different reasons could evaporate or could be reduced," he said.
This comes in the same week that Paul Volker Ex chairman of the U.S. Federal Reserve has warned of a coming financial crises if similar policies as mentioned by Rato are not implented. Although Paul Volker suggested that he didn't expect the polices required to be implemeneted.
Source: ChannelNewsAsia.com - IMF chief warns global markets risk 'abrupt correction'
Rato said "the global financial system was out of kilter because of the huge US current account deficit, weak growth in Europe and Japan, the low savings rate of US consumers and inflexible currency regimes in Asia."
"If policies do not adapt, do not change to react to these imbalances, we run the risk of an abrupt correction of the markets ... (when) confidence for different reasons could evaporate or could be reduced," he said.
This comes in the same week that Paul Volker Ex chairman of the U.S. Federal Reserve has warned of a coming financial crises if similar policies as mentioned by Rato are not implented. Although Paul Volker suggested that he didn't expect the polices required to be implemeneted.
Source: ChannelNewsAsia.com - IMF chief warns global markets risk 'abrupt correction'