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IMF endorses G7 action plan

(Agencies)
Updated: 2008-10-12 08:35

WASHINGTON - Finance leaders from the International Monetary Fund's 185 member countries on Saturday endorsed a plan announced by major economies to chart a course out of the credit crisis.

International Monetary Fund Managing Director Dominique Strauss-Kahn speaks at a news conference of the annual IMF-World Bank meeting in Washington October 11, 2008. [Agencies]

The International Monetary and Financial Committee (IMFC), chaired by Egyptian Finance Minister Youssef Boutros-Ghali, called for "exceptional vigilance, coordination, and readiness to take bold action" to address the crisis.

Boutros-Ghali said the fact that all 185 IMF member countries, including emerging and developing economies, supported the Group of Seven plan.

"We are committed to the plan of action," Boutros-Ghali said. "This is an essential element for restoring confidence."

The G7 on Friday vowed to take all necessary steps to unfreeze credit markets and ensure banks can raise money, but offered no collective course of action to avert a deep global recession.

IMF Managing Director Dominique Strauss-Kahn said the committee agreed the IMF should take the lead in looking more in depth at what went wrong and coordinate with other institutions.

He said the fund was the right forum for the job, given its universal membership, and that the IMF stood ready with resources to help any country facing financial difficulties due to the crisis.

The IMF cautioned that emerging economies may experience spillover effects from the financial crisis and it was important that they preserve economic stability.

"For these reasons, it is critically important that collaborative action be coordinated between advanced and emerging economies," the panel said.

In advanced economies, the committee said, policies need to provide "essential stimulus in the face of the risk of a pronounced economic downturn, as confidence in the financial system is restored."