International Monetary Fund chief, Christine Lagarde, encouraged emerging market countries interested in buying European government debt to focus on nations that have trouble borrowing, not just those with strong fiscal track records.
"It's a very interesting development to see that emerging economies are actually looking at buying European bonds", Ms Lagarde said in an interview. Major emerging market nations—Brazil, Russia, India and China—plan to meet next week in Washington to consider policies in their interest to support the global economy. They have the financial wherewithal to buy huge amounts of debt—China's reserves alone total $3.2 trillion—but they are viewed as conservative investors. Ms. Lagarde was encouraging them to take more risks as a way to help troubled European countries.
Ms Lagarde also maintained her stance that European banks need more capital—despite recent resistance from eurozone officials—saying it would help not just Europe but even emerging-market nations.
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