IMF chief: Europe needs banking union

25 September 2012

Policymakers in Europe should press ahead with plans to create a banking union sooner rather than later in order to make the region's financial system safer.

That is the view of Christine Lagarde, managing-director of the International Monetary Fund (IMF), who has called on officials to implement this structural change in the near future.

During a speech delivered at the Peterson Institute for International Economics in Washing DC yesterday (24 September), Ms Lagarde explained that such a step is vital to prevent countries being dragged towards international bailouts by ailing lenders.

"We continue to believe it should be initiated as soon as possible - to break the vicious cycle between banks and sovereigns," she noted.

Ms Lagarde went on to say it is important for decision makers to support a "sustained rebound" globally, as opposed to a mere "bounce" in economic activity.

"We need certainty, not uncertainty. We need decision makers to be real action takers," the IMF chief stated.

By Gary Cooper

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