Tuesday, June 9, 2009

IMF to Europe - Get Your House in Order

Why is it that the IMF has been the only logical voice the last couple of months?

From the Telegraph.

The International Monetary Fund has called on eurozone governments to take urgent steps to clean up the banking system as losses mount, and advised the European Central Bank to prepare "all unconventional options" in case the crisis deepens.

"To restore confidence, you need total disclosure of possible losses," said Dominique Strauss-Kahn, the IMF's managing director. "Not only losses which are linked to the original sub-prime crisis, but also the losses linked to the slowdown in the economy, and impaired assets. There are lots of things that still have to be disclosed," he said, adding that credit mechanism remained jammed.

That should be obvious but every goverrnment in the world seems to be trying to limit disclosure not maximize it.

This does not surprise me at all though the first I have heard about the German elections.

There are widespread concerns that Germany in particular is hiding bank problems until after the September elections, using its "bad bank" scheme to keep "zombie institutions" alive.

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