IMF: Economy Hit By Crisis of Confidence

Posted September 23rd, 2011 at 4:05 pm (UTC-5)
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The head of the International Monetary Fund says the global economy is in the grip of a “crisis of confidence” and urged nations to move quickly and act together to solve problems.

IMF Managing Director Christine Lagarde spoke Friday, as finance ministers and central bankers from around the world gathered in Washington for talks with World Bank officials and others.

Her remarks follow days of turmoil on financial markets that saw steep losses and some modest gains as investors worried the world may be headed into another recession.

Analysts say investors are skeptical that political leaders in Europe will solve government debt problems, or that Washington politicians will stop bickering and take steps to bolster growth and jobs.

Global markets sustained major losses earlier this week after the U.S. central bank warned that it sees “significant downside risks” to the already struggling U.S. economy, and that a complete recovery is years away.

Thursday, finance officials from 20 of the world's emerging and wealthy nations pledged to launch a coordinated effort to bolster the struggling global economy. The action had little immediate impact on financial markets.