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Renita Jablonski: Meanwhile, the head of the International Monetary Fund has called for global action to tackle the credit crunch. Dominique Strauss-Kahn told Britain’s Financial Times governments around the world will have to intervene to save the day. From London, Stephen Beard reports.
Stephen Beard: Strauss-Kahn says the credit crisis is severe and is clearly global. The IMF chief is calling for coordinated intervention by governments around the world. He’s looking for something more radical than central banks pumping more cash into the banking system. He says the action to bail out Bear Stearns in the U.S. and the Northern Rock bank in the U.K. may have to become more widespread.
In effect, according the Financial Times, he’s saying billions and billions of taxpayers’ dollars should be used to take control of doubtful mortgage-backed securities. Only then, he says, will the credit system start functioning properly. The Financial Times describes this as highly controversial and unlikely to appeal to governments or taxpayers.
In London, this is Stephen Beard for Marketplace.