IMF’s Immediate Focus Is to Contain Europe’s Debt Crisis

The International Monetary Fund said its priority is to contain the European debt turmoil as it also looks at lessons from the global financial crisis.

“In order to facilitate the recovery from the global financial crisis, the most immediate priority is to help restore financial stability, notably but not only in the euro area, and limit potential spillovers to other regions,” the IMF said in in its agenda for financial surveillance released today. “This priority informs not only financial surveillance but also the Fund’s technical assistance and lending operations.”

The agenda is part of the fund’s efforts to improve its surveillance after an internal audit released last year found that the IMF was overly influenced by developed countries, including the U.S. and the U.K., when assessing their economies and ended up missing signs of fragility that led to the 2008 global financial crisis.

Priorities for the longer term focus on how to help member countries better detect risks, build more resilient financial systems and manage crises, according to the program.

Measures in Managing Director Christine Lagarde’s “action plan” include assigning a financial expert when IMF teams conduct annual assessments of countries’ economies and improving the availability of financial sector information.

To contact the reporter on this story: Sandrine Rastello in Washington at srastello@bloomberg.net;

To contact the editor responsible for this story Christopher Wellisz at cwellisz@bloomberg.net

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