BASSETERRE, St. Kitts – AS the global economy prepares for recovery, Managing Director of the International Monetary Fund (IMF) Dominique Strauss-Kahn has stressed the significance of reshaping the global financial framework.
The economic and financial crisis tested the financial frameworks of the world’s economies and led top policymakers to reconstruct their respective financial sectors to be more robust in response to crisis.
Since early trends of recession were recognized, countries began to widen regulatory provisions, increase supervision of financial institutions and improve the measurement and regulation of systemic risks through continuous statistical collection and analysis. However, at this point, Strauss-Kahn noted that such reforms must be carried out with little or no added burden to economies and taxpayers.
“While some progress has already been made on these priorities, understandably the public is growing impatient with the slow pace of reform. And as taxpayers see bankers continuing to draw outsized bonus payments, even as unemployment continues rising, it is fair for them to question whether politicians are still committed to achieve serious and lasting reform,” the IMF top official noted in addressing the European Parliament earlier today.
Strauss-Kahn asserted that focus must not only be placed on reaching economic recovery, but also on sustaining growth thereafter. Approaches to reform have been varied in direction and speed and this presents a great risk of uncoordinated policies and distorted capital flows.
“While financial markets have staged an impressive comeback, we should not fool ourselves into believing that this means smooth sailing going forward. Even as we take steps to address the risks of yesterday, we must already be thinking about the new risks of tomorrow—and how best to manage them,” he stated.
At the Eastern Caribbean Currency Union, efforts have been made not only to lead the economies of the region to recovery, but also to achieve sustainable growth. The Eastern Caribbean Central Bank Monetary Council adopted its Eight-Point Stabilization and Growth Programme, which is expected to reform the sub-region’s financial sector.
The programme addressed issues of financial programming, fiscal reform, debt management, public sector investment programmes and social protection programmes, with a special focus on the regulation of non-banking institutions.
