IMF: World on brink of recession; prepares special loan program

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Thursday, October 9, 2008

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Dominique Strauss-Kahn made his comments at a press briefing.

The head of the International Monetary Fund (IMF) says the world is on the brink of a global recession but predicts the economy will begin to recover by late 2009.

Dominique Strauss-Kahn, Managing Director of the IMF, stressed nations must work together to avert a global recession and warns there is "no domestic solution" to the crisis. He also said this week's coordinated interest rate cuts around the world are a good example of the international cooperation needed to restore faltering economies.

Furthermore, he announced the IMF has activated an emergency program Wednesday that allows the fund to provide loans more easily and quickly to emerging countries in economic trouble. This program was first used during the 1997 Asian crisis.

The program might be used in Iceland, which has seen major problems hitting the financial sector. Iceland has been forced to nationalize the three largest banks and, most recently, Kaupthing Bank.

The IMF chief made these remarks in Washington D.C. on Thursday, as top officials from IMF nations and the G-7 industrialized countries are gathering for meetings on economic issues. U.S. President George Bush is set to meet with G-7 finance ministers at the White House on Saturday.

Related News

Wikipedia has more about this subject:

2008 Icelandic financial crisis

• "Iceland nationalises Kaupthing Bank". Wikinews, October 9, 2008

Sources

This article is based on IMF: World on Brink of Recession by VOA News, which is in the public domain.

• Lesley Wroughton "IMF readies emergency aid for wounded economies". Reuters, October 9, 2008
• Press Release: "Quick, Forceful, Cooperative Action Needed on Crisis—IMF". International Monetary Fund, October 9, 2008
  

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