Christine Lagarde warns economic leaders

MARTIN CRUTSINGER
Last updated 10:54 16/01/2014

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The head of the International Monetary Fund is warning policymakers to avoid mistakes that could derail a fragile global recovery.

IMF managing director Christine Lagarde says Congress should promptly increase the US government's borrowing limit and the Federal Reserve should avoid withdrawing its financial support too rapidly.

In a speech at the National Press Club, Lagarde says Europe is turning the corner from recession. But she adds that the recovery is uneven and some nations are burdened by high debt and credit restraints. She says the European Central Bank could do more to help the recovery by providing targeted lending.

For big emerging economies such as China, Lagarde says financial regulation needs to be strengthened and officials will need to be alert for any threats such as asset bubbles.

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- AP

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