Managing Director Christine Lagarde of the International Monetary Fund (IMF) has called for further action to reform the global financial system, by strengthening crisis management tools and the overall architecture of the system. “We are still at a great distance from our final destination,” Ms. Lagarde said in a speech in New York,” and with the stakes rising by the day, we stand at a crossroads. She said that five years into the crisis, while important steps have been taken, the goal of a safer financial system is not yet secured. Policymakers need to lay out and follow a clear roadmap of how to finish the job—not just looking to the next five or ten years, but looking to the next weeks and months ahead.” The next steps by policymakers in the financial sector will be “critical to breaking the damaging cycles of the crisis,” which include the political economy of deciding and implementing policies, she said, adding, “The immediate focus should be on repairing the health of the financial system. Without repair, weak banks will continue to strangle growth.” In this regard, European banks are a priority to repair, she said, but because the world is deeply interconnected, restoring the health of the European banks lies in the interest of all. “Let me be clear: The heart of European bank repair lies in Europe. That means more Europe, not less,” Ms. Lagarde said, adding that a single European financial market needs to have a more integrated framework.
