* Lagarde says progress made on banking union
* IMF also ups Chile 2012 growth f'cast to 5.5 pct
SANTIAGO Dec 13 The head of the International
Monetary Fund on Thursday welcomed a landmark deal that gives
the European Central Bank new powers to supervise banks, saying
progress had been made in the aim of reinforcing the region's
banking union pillar.
The European governments' deal boosted confidence in the
single currency bloc as it enters the fourth year of its debt
"On the European banking union ... There has been very
significant progress made yesterday about the European
supervisor. And I can only welcome the agreement that has been
reached," Lagarde said during a press conference in Chile,
flanked by the country's Finance Minister and central bank
"We regard this as one of the three pillars to reinforce the
euro zone: the currency pillar, the banking union pillar and the
fiscal union pillar. On the banking union pillar clearly
progress has been made yesterday and we salute it," she added.
Chile's robust economy will grow 5.5 percent this year,
upwardly revised from a previous 5 percent forecast, Lagarde
also said on Thursday.
But the world's No. 1 copper producer is not immune to
global economic woes and should diversify its economy, she
Earlier on Thursday, Lagarde said inadequate tackling of the
so-called U.S. fiscal cliff, an acceleration of the euro zone
debt crisis, and volatility in commodity prices are potential
risks for export-dependent Latin America.