Saturday, October 11, 2008

IMF Warns of Systemic Meltdown

The world financial system is teetering on the "brink of systemic meltdown", the head of the International Monetary Fund (IMF) has warned in Washington.

Dominique Strauss-Kahn said rich nations had so far failed to restore confidence, but he endorsed a new action plan by the G7 group.

He also said the IMF was ready to lend to countries in dire need of capital.

Mr Strauss-Kahn spoke after talks with US President George W Bush, G7 finance ministers and the World Bank.
On Friday in the US capital, the G7 group of most industralised nations released a five-point plan to free up the flow of credit, back efforts by banks to raise money and revive the mortgage market.

Speaking in Washington on Saturday, Mr Strauss-Kahn said: "Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown."

BBC made it sound as if he later retreated from his assessment:
He later told a news conference: "The first co-ordination between advanced countries and the rest of the world is now on track."