Government intervention at a global level is needed to tackle the credit crisis, said Dominique Strauss-Kahn, IMF managing director, who also warned that market turmoil will take a serious toll on world growth. Strauss-Kahn told the FT that the need for public intervention was “becoming more evident”. Government intervention – whether in the securities market, housing or the banking sector – would act as a “third line of defence” supporting monetary and fiscal policy, he said. The controversial call comes days before world finance ministers and central bank governors gather in Washington for the spring meetings of the IMF and World Bank. Policymakers will discuss the credit crisis and steps to address it.
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