IMF Managing Director Dominque Strauss-Kahn urged industrial and emerging market countries to do their share through macroeconomic and financial market policies to mitigate the impact of the current financial crisis which is causing a global slowdown.
"The world economy has entered a difficult phase, with the financial crisis spreading to the real economy," Strauss-Kahn said. "This has become a global problem that requires a global solution."
The current financial crisis, he said, began as "a problem in a single sector in a single economy has become a global problem." And what first appeared as a problem for financial institutions, is now becoming a problem for economies. He added that the effects that are already seen in the United States will increasingly be felt in Europe and that emerging economies will also not remain immune from the crisis.
Auditors and supervisors need to encourage consistency across institutions on asset valuation and crisis-related writedowns, he added. Strauss-Kahn said emerging markets can learn from the risk management and regulatory failures of industrial economies by building regulatory capacities to safeguard against the risks of non-transparent instruments and excesses in lending.
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