IMF / LAGARDE

IMF Managing Director Christine Lagarde calls upon global policymakers to act to get ahead—and stay ahead—of the crisis, she notes that in far too many countries, improvements in financial markets have not translated into improvements in the lives of people. IMF

• Categories: News & Features / News Stories / Unifeed
• Video Length: 00:02:00
• Production Date: 10 April 2013
• Asset Language: Original
• Corporate Name: INTERNATIONAL MONETARY FUND - IMF
• Subject Topical: ECONOMICS; ECONOMIC CONDITIONS; ECONOMY; ECONOMIC DEVELOPMENT
• Geographic Subject: UNITED STATES; CHINA; CYPRUS
• MAMS Id: U130410c

Description

STORY: IMF / LAGARDE
TRT: 2.00
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS

DATELINE: 10 APRIL 2013, WASHINGTON DC, UNITED STATES

Shotlist

1. Wide shot Christine Lagarde, Managing Director of the IMF
2. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
The good news is that after a particularly volatile period, financial conditions are showing signs of improvement. Thanks to the actions of policymakers, the economic world no longer looks quite as dangerous as it did six months ago.
3. Cutaway, audience
4. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
We are now seeing the emergence of a “three-speed” global economy—those countries that are doing well, those that are on the mend, and those that still have some distance to travel.
5. Cutaway, audience
6. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
This does not mean that everything is settled. Far from it. An outstanding issue is that public finances appear unbalanced. Adjustment is too aggressive in the short term, and too timid in the medium term. This adds to uncertainty and casts a shadow on the recovery.
7. Cutaway, audience
8. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
In too many cases—from the United States in 2008 to Cyprus today—we have seen what happens when a banking sector chooses the quick buck over the lasting benefit, backing a business model that ultimately destabilizes the economy. We simply cannot have pre-crisis banking in a post-crisis world.
7. Cutaway, audience
8. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
With over 200 million people out of work today, job creation is an urgent priority. A high level of employment is the best guarantee of a vibrant economy and a healthy society. Without this, we risk a wilderness of wasted potential and ruined ambition—especially for a generation of young people.
8. Wide shot, stage

Storyline

In a speech at the Economic Club of New York on April 10, IMF Managing Director Christine Lagarde called upon global policymakers to act to get ahead—and stay ahead—of the crisis.

“The good news is that after a particularly volatile period, financial conditions are showing signs of improvement. Thanks to the actions of policymakers, the economic world no longer looks quite as dangerous as it did six months ago,' she noted. Lagarde was speaking ahead of the IMF-World Bank Spring Meetings that take place April 19-21 in Washington, involving economic policymakers from the IMF’s 188 member countries.

Lagarde observed that while the global economy had shown signs of strengthening since six months ago “We are now seeing the emergence of a “three-speed” global economy—those countries that are doing well, those that are on the mend, and those that still have some distance to travel," she noted.

The IMF Managing Director said all three groups need action to stay ahead of the crisis. The emerging markets and developing economies are worrying about the potential fallout from exceptionally loose monetary policy in advanced economies. These countries need to boost their defenses including by rebuilding fiscal policy space and stepping up banking sector regulation and supervision.

At the same time, advanced economies also bear some responsibility in terms of delivering a better fiscal policy and more financial repair. She said while the fiscal cliff had been avoided, the United States has more work ahead of it. "This does not mean that everything is settled. Far from it. An outstanding issue is that public finances appear unbalanced. Adjustment is too aggressive in the short term, and too timid in the medium term. This adds to uncertainty and casts a shadow on the recovery," she said.

At this point in the recovery, she said it is more important than ever to put in place a credible medium-term roadmap to bring down U.S. debt.

While euro area policymakers have taken a number of significant steps, the priority in that region is to clean up the banking system by recapitalizing, restructuring, or—where necessary—shutting down banks. This includes making progress with banking union.

Lagarde noted that there is another set of overarching issues that affects all regions—issues that have been with us since the beginning of the crisis but have not yet been fully resolved.

The first of these is financial sector reform. "In too many cases—from the United States in 2008 to Cyprus today—we have seen what happens when a banking sector chooses the quick buck over the lasting benefit, backing a business model that ultimately destabilizes the economy. We simply cannot have pre-crisis banking in a post-crisis world," Lagarde said.

The second overarching issue is more balanced global demand: there is a need for more action from surplus countries, including by strengthening investment in Germany and strengthening consumption in China.

The third point is more emphasis on growth, jobs, and equity. The best way to create jobs is through growth, but policymakers can also deploy labor market policies to spur job creation more directly. “With over 200 million people out of work today, job creation is an urgent priority. A high level of employment is the best guarantee of a vibrant economy and a healthy society. Without this, we risk a wilderness of wasted potential and ruined ambition—especially for a generation of young people," Lagarde said.