Sun, Feb 21, 2016 - Page 13 News List

G20 should be focused on policy spillovers: Lagarde

Reuters, WASHINGTON

IMF managing director Christine Lagarde on Friday said that G20 finance ministers and central bank governors should focus on international economic spillovers from their policy decisions when they meet in Shanghai next week.

“The G20 I think, is going to have to focus on spillovers, on spillbacks and on the combination of various policies in play at the moment,” Lagarde told reporters after she was re-elected to a second five-year term as the crisis lender’s leader.

Lagarde said that at the moment, the “asynchronicity” of US, Japanese and European monetary policies needed to be reviewed and practices better coordinated.

She also said that G20 ministers should examine the interactions of their nations’ fiscal policies and structural reform moves.

By better coordinating these policies, the major economies can improve market confidence and limit the spillovers on the rest of the IMF’s 188 member nations, she said.

ROILED MARKETS

Currently, many oil and commodity-exporting nations are experiencing financial difficulties, as the Chinese economy slows.

“Are we in a 2009 moment, I don’t think so. Are we in a moment where coordination is needed? Yes,” Lagarde said, referring to the deepest part of the recent financial crisis and widespread recession.

G20 finance ministers and central bank governors are scheduled to meet in Shanghai on Thursday next week, amid markets roiled by cheap oil and commodity prices and uncertainty over China’s growth rate.

Lagarde added that China’s transition to a more consumer-driven economy “will not be a walk in the park” and is likely to bring economic difficulties and turbulence, but that she believed Chinese leaders understood their influential place in the international economy as they make restructuring decisions.

She said she has urged Chinese leaders to communicate their policy intentions more clearly.

“What is critical, for one, is a good and solid communication. This is something that I have said before and this is something that I believe is being heard by Beijing,” Lagarde said.

The former French minister of finance, 60, was the only nominee as the IMF’s chief for the five-year term starting on July 5. She was re-elected by board consensus.

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