Washington: The head of the International Monetary Fund has called for further action to reform the global financial system by strengthening crisis management tools and the overall architecture of the system.
Christine Lagarde, managing director of the IMF, Friday said that while important steps have been taken after the global financial crisis broke out in 2008, the goal of a safer financial system is not yet secured.
In a prepared speech for delivery at the Leaders' Dialogue in New York, Lagarde noted that policymakers need to lay out and follow a clear road map of how to finish the job -- not just looking to the next five or ten years, but looking to the next weeks and months ahead.
Lagarde said the next steps by policymakers in the financial sector will be "critical to breaking the damaging cycles of the crisis", which include the political economy of deciding and implementing policies, and the "immediate focus should be on repairing the health of financial system", reported Xinhua.
"Let me be clear: the heart of European bank repair lies in Europe. That means more Europe, not less," Lagarde said, adding that a single European financial market needs to have a more integrated framework.
She stressed that breaking the vicious cycle of financial-sovereign risks needs more risk-sharing across borders in the banking system and deeper fiscal integration "should go hand-in-hand with these efforts".
Lagarde also called for strengthening the architecture of the financial system with smarter regulation, stronger supervision, and appropriate private sector incentives.
"What is our ultimate goal for the financial system? It is to build a system that serves growth, but is not wild. A system where there is profitability -- certainly - but that does not come at the expense of stability," she added.
First Published: Saturday, June 9, 2012, 13:03