The head of the International Monetary Fund says the world economy is
likely to shrink this year, in what some are referring to as the "Great
Recession."
IMF Managing Director Dominique Strauss-Kahn told
a conference in Tanzania Tuesday that sharp declines in world trade are
likely to hurt African economies.
Meanwhile, the chairman of
the U.S. Federal Reserve, the U.S. central bank, warns that a
sustainable economic recovery will "remain out of reach" without a
comprehensive overhaul of financial regulations.
Fed Chairman
Ben Bernanke says officials, both in the United States and around the
world, will fail if they only focus on strengthening regulations for
certain sectors of the economy, like banking.
Bernanke's
comments come as U.S. lawmakers start work on legislation aimed at
enhancing financial regulations and as key financial officials get
ready to meet in London ahead of next month's summit of the world's 20
major economic powers - the G-20.
European Union financial
officials preparing for the April summit have already decided the IMF
should get more money to bail out countries facing economic crises.
In
a document released Tuesday, the EU backed calls to double the IMF
crisis fund to $500 billion, suggesting some of the money could come
from countries like China and Saudi Arabia, which have built up
substantial currency reserves.
However, the document also exposed some disagreements with the U.S.
EU officials rejected the idea of expanding economic stimulus measures, something the U.S. supports.
A
World Bank study Sunday said the global economy will shrink in 2009 for
the first time since World War II, while world trade is declining at
the fastest rate in 80 years.
Some information for this report was provided by AP and Reuters.
