Analysts Disappointed by IMF, World Bank Meeting

Posted September 26th, 2011 at 10:10 am (UTC-5)
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Recent efforts by the International Monetary Fund and the World Bank to help Europe deal with government debt problems got mixed reviews on Monday.

Oil prices posted modest gains as investors bet that resolving the issue would boost the economy and increase energy demand and prices. Prices on world stock markets were mixed.

After days of meetings in Washington, IMF members Saturday pledged to work decisively and in a coordinated way to deal with European debt problems. But no specific action was announced.

U.S. Treasury Secretary Timothy Geithner urged his European counterparts to join with the European Central Bank to solve the Greek debt crisis once and for all.

Worries that Greece might fail to repay some of its massive debt has lenders concerned that other European nations might also be in trouble.

Analyst Mohamed El-Erian, who runs the huge bond firm PIMCO, says there has been too little progress on debt issues, and predicted continued volatility on financial markets. He says dithering and bickering among political leaders is making the crisis worse. He says there is little time left to act.

In a Financial Times opinion article Monday, University of Chicago Finance Professor Raghuram Rajan said leaders failed to agree on the “concrete” actions markets were hoping to see.

In the meantime, Labor ministers from the Organization for Economic Cooperation and Development and the International Labor Organization say it is urgent to come up with effective economic solutions because there are 200 million people out of work around the world.

The OECD and ILO officials gathered in Paris Monday. They say without prompt action, the number of jobs lost to the economic crisis could double and hit 40 million by the end of next year.