WASHINGTON: Restoring the health of European banks is critical to strengthening a global economy that is struggling to regain its footing and is at risk of losing ground, International Monetary Fund (IMF) Managing Director Christine Lagarde said in a speech before Leaders Dialogue in New York. Lagarde said that it is urgent that European leaders take direct stakes in banks, and in the longer term they need to complement monetary union with financial union. Unified bank supervision, a bank resolution authority and a single deposit insurance fund are the critical steps needed, she added. Lagarde pointed to a vicious circle of events that is weakening growth and must be broken. While Europe is not alone in its need to complete financial regulatory and supervisory reforms, however it is a priority because of the interconnected nature of global finance, she said.
Published in The Express Tribune, June 10th, 2012.
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