Friday, March 14, 2008

IMF tells states to plan for the worst

From the Financial Times:

Governments might have to intervene with taxpayers' money to shore up the financial system and prevent a "downward credit spiral" from taking hold, the International Monetary Fund said yesterday.

John Lipsky, the IMF's first deputy managing director, said: "We must keep all options on the table, including the potential use of public funds to safeguard the financial system."

The statement by the senior IMF official marks the second radical policy intervention from the IMF this year. It had previously called on governments to consider using fiscal policy to offset the impact of the credit crisis on growth....MORE