IMF Staff Warns Sluggish Bank-Sector Repairs Threaten Recovery |
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March 10, 2011
Sluggish repairs to the world’s financial sector are threatening to upset the fragile global recovery, and moral hazard–apathy cultivated when lenders are confident they’ll be bailed out–has grown since the financial crisis began, staff at the International Monetary Fund warned Wednesday.
Sluggish repairs to the world’s financial sector are threatening to upset the fragile global recovery, and moral hazard–apathy cultivated when lenders are confident they’ll be bailed out–has grown since the financial crisis began, staff at the International Monetary Fund warned Wednesday. “The diagnosis and repair of financial institutions and overall asset restructuring are much less advanced than they should be at this stage,” IMF staff–including senior officials at the fund–said in a discussion paper. Combined with an rise in moral hazard, “vulnerabilities in the global financial system remain considerable and continue to threaten the sustainability of the recovery,” staff said.
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