IMF Chair: Bank Balance Sheets Must Be Cleansed

Jonathan Bronsetin, Talk Radio News Service

Out of the International Monetary Fund’s, Spring 2009 meeting came a simple, but poignant message: the world is still in a recession. But the key to any recovery, according to the IMF, relied upon the restoration of the health of the banking system.

“You never recover before you completed the cleaning up of the balance sheet of the financial sector,” said Dominique Strauss-Kahn, Chairman of the IMF.

Strauss-Kahn believes that any nation can postpone cleaning the banks balance sheet, but this will only postpone a full-fledged recovery.

“I don’t underestimate the difficulties of the task, but the fact that it is difficult does not make it less necessary,” said Strauss-Kahn.

Additionally, Strauss-Kahn applauded the efforts of governments to recognize and quickly deal with this recession through the implementation of successful economic stimulus’s. He believed that the stimulus had a 1/3 greater affect because it occurred in a coordinated fashion.

Strauss-Kahn bluntly predicted. “Our [the IMF] belief is that the crisis is far from over, and there are long months of economic distress in front of us.”