Yesterday the IMF released a survey projecting this year’s world economic growth rate to fall to approximately ½ percent. The IMF further noted that “[d]espite wide-ranging policy actions by governments and central banks around the world, financial strains remain acute, pulling down the economy,” thus illustrating the need for the adoption of new policies intended to “produce credible loan loss recognition; sort financial companies according to their medium-run viability; and product public support to viable institutions by injecting capital, and carving out bad assets, including possibly through a ‘bad bank approach’”

Mr. Jamie Carauna, Financial Counsellor of the IMF, stated that “[w]e think that more decisive action is needed now by both policymakers and market participants, and with greater emphasis on balance sheet cleansing.” The IMF projects that advanced economies will “experience their sharpest contraction in the post-war period,” and that real economic activity will contract by around 1½ percent in the United States, 2 percent in the Eurozone, and 2½ percent in Japan. Mr. Oliver Blanchard, IMF Chief Economist, also noted that in response to this downward economic growth, governments now more than ever must adopt stronger economic measures and macroeconomic monetary and fiscal policies in order to “to restore financial sector health and in order to stabilize the economy.”