International Monetary Fund chief Dominique Strauss-Kahn on Wednesday said the situation in Europe remained troubling, keeping up pressure on policymakers to find more effective measures to deal with the euro zone's debt crisis.
In a speech in Geneva, the IMF managing director said the effects of the global financial crisis were still in play. The situation in Europe remains troubling and the future is more uncertain than ever.
Strauss-Kahn said the Greek and Irish debt bailouts highlighted the need for a more coordinated response to economic and financial storms.
The delay in strengthening supervision and creating effective crisis resolution mechanisms could well lead to the next crisis, Strauss-Kahn cautioned, later dismissing concerns that Europe's single currency may have aggravated its problems.
For me the euro is not the cause. The euro has to be complemented by better coordination at the regional level, he told diplomats gathered at the U.N.'s European headquarters.
A day earlier he had criticized the euro zone for a disjointed response to the debt crisis. The euro zone has to provide a comprehensive solution to this problem. The piecemeal approach, one country after another, is not a good one, he said during a visit to Greece.
In his speech in Geneva, he called for stronger economic and financial oversight noting that without proper supervision disaster could be just around the corner.
He said reforming banking sector regulations was urgent and necessary and authorities across the globe were not moving fast enough to fix the shortcomings.
It is important to apply new rules to the financial sector, Strauss-Kahn said. We need supervision that is not afraid of saying no to powerful interests.
He also stressed that most of the world has moved past the global financial crisis, with Asian economies largely in the clear and Latin America and Africa faring well.
There is strong growth not only in Brazil but also in Chile, Peru and Colombia. It required one year for African countries to return to growth, he said.
In the United States the situation is more uncertain, he continued. We are not out of the crisis yet but there should not be an overly European-centric perspective.
(Writing by Lesley Wroughton, Editing by Chizu Nomiyama, John Stonestreet)