IMF’s Lagarde Warns World Economy Entering ‘Dangerous’ Phase

Christine Lagarde, the new managing director of the International Monetary Fund chief, warned that the world economy is in a “dangerous new phase” and that officials must take new steps to strengthen growth.

Lagarde, speaking to international finance officials and economists in Jackson Hole, Wyoming, said the U.S. should arrest a slide in house prices and European banks must be required to boost capital to prevent the continent’s debt crisis from infecting more countries. The U.S. and European Union should enforce long-term budget discipline to free up cash for short-term stimulus, she said.