Central banks’ prompt action keeps crisis at bay, says IMF

Central banks’ prompt action keeps crisis at bay, says IMF
WASHINGTON - SHARP swings in world financial markets have yet to challenge the stability of the system and prompt central bank action ought to ensure an orderly adjustment, the International Monetary Fund (IMF) says.
The multilateral lender, which bailed out several countries during the 1997 Asian financial crisis, said on Friday that global economic growth should not be derailed by the mortgage and credit jitters spreading from the US.

‘While the situation is still evolving, we continue to believe that the systemic consequences of the reassessment of credit risk that is taking place will be manageable,’ said IMF spokesman Masood Ahmed.

‘The fundamentals supporting strong global growth remain in place, and the re-establishment of credit discipline that is occurring is a healthy development.’

While its officials continue to closely track market developments around the globe, the IMF said that ‘prompt action’ by central banks to add cash to the banking system should help avert a crisis in credit markets.

AFP

Source :  Straits Times - 12 Aug 2007

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