Fragile economy warns head of the IMF
Dominique Strauss-Kahn, head of the International Monetary Fund, warned on Monday that the global economy is still in a "highly fragile" state following the financial crisis, and could face further turmoil in the months ahead.
"Financial conditions have improved but are far from normal. Signs show confidence returning, but banking systems in many advanced economies remain undercapitalised, weighed down by leaden legacy assets and, increasingly, underperforming loans.
"On the household side, weak financial positions and high unemployment will damp down on consumption for some time … and large public deficits add to vulnerabilities, said Strauss-Kahn.
The Bottom Line:If Mr Cable has his way...
"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more