The International Monetary Fund has issued a warning that the stability of the global economic recovery could be threatened by ongoing sovereign debt and financial sector risks, according to The Wall Street Journal. On Tuesday, the IMF said, “A host of measures are need in different countries to reduce vulnerabilities and rebalance growth in order to strengthen and sustain global growth in the years to come.” The group highlighted “serious funding pressures for major banks and sovereigns” that could damage the stability of certain economies, especially in Europe.
The IMF singled out financial turmoil in Ireland and Greece as poising a specific threat to the global economy, and warned that the risk of contagion to other eurozone states could continue to weigh on economic activity. Additionally, the IMF pointed to the need for increased global regulation of financial services activity, and warned emerging economies to be ready for surging capital inflows, urging governments to be “attentive and act in a timely manner when pressures of inflows are building up.”
