BERLIN (Reuters) - The global economic crisis will continue and countries must do more to adopt financial market regulations, International Monetary Fund Managing Director Dominique Strauss-Kahn told a German magazine on Saturday.
“The global economic crisis will continue, even if Germany and France had some good figures in the second quarter,” Strauss-Kahn was quoted as saying in an advance copy of an article to be published in Der Spiegel on Sunday.
Strauss-Kahn said he wanted to see more action from nations to curb bankers’ pay and tighten capital requirements in the banking sector.
“It is right to say that not enough has happened. I hope the Group of 20 meeting in Pittsburgh will bring new momentum,” he said. Leaders of the G20 meet later this month to try to agree on measures to help stop a repeat of the financial crisis.
Strauss-Kahn said the lesson of the financial crisis was that the market economy needed rules to function.
“Without new rules, there will be a return to the old behavior,” he said.
Governments needed to develop ‘exit strategies’ from the stimulus packages introduced to boost economies, said Strauss-Kahn, adding, however, that it was dangerous to think the crisis was already over.
“We need such ”exit strategies.“ We are working on them, but I would disagree with any .... demand to think about implementing them now,” he said.
Asked by the magazine how liquidity that had been pumped onto the markets would be withdrawn, Strauss-Kahn said a combination of higher interest rates and ending direct intervention of central banks would be needed.
He also said the IMF had sufficient resources for now but that if the body were to take on additional responsibilities to coordinate a financial safety net for countries in financial difficulty, it would need a further financial boost.
Reporting by Madeline Chambers; Editing by Andy Bruce