Post date: Feb 19, 2011 8:14:10 PM
IMF chief Dominique Strauss-Kahn says the financial crisis might be behind us, but "we are not out of the woods", and the social crisis is still ahead of us.
PARIS, FRANCE (FEBRUARY 19, 2011) REUTERS - Finance ministers of the world's major economies reached a fudged accord on Saturday (February 19) on how to measure global economic imbalances after China prevented the use of exchange rates and currency reserves as indicators.Ministers and central bank governors agreed on a list of indicators including public debts and fiscal deficits, private savings and private debt, the trade balance and other components of the balance of payments such as net investment flows.
But IMF chief Dominique Strauss-Kahn warned that despite the G20 consensus, the global economy was still not fully on the road to recovery.
"I am not in those saying that the crisis is behind us. The financial crisis is behind us, hopefully, we never know, but hopefully. Apart from the economic crisis which is behind us, as I said, in most parts of the world, the economy is really recovering but the social crisis is still there and very strong and for the people, the man in the street, that's what is important," Strauss-Kahn told journalists.
The G20 communiqué said ministers agreed to work on strengthening the international monetary system to help avoid disruptive fluctuations in capital flows, disorderly movements in exchange rates, and regulation in the markets.
"We have to go on with a very strong action at a national level and on the international level. What does that mean? That advanced economies have to go on with the reforms of the financial sector.
Remember two years ago. A lot has been said about repairing the financial system. It will be repaired very rapidly, we will never see that again, bonuses will disappear, all these kinds of things and when you look outside today: financial system is back to business as usual," Strauss-Kahn said.
With world shares at 30-month highs, investors seem content for the G20 to take its time, whereas at the height of the crisis two years ago markets were baying for policy action.