Oct

20

IMF Investigating Manging Director affair.

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An “outside firm” has been hired to investigate claims that the IMF’s Managing director, Dominique Strauss-Kahn, was engaged in an affair with a female staffer who was latter told to leave the organisation with financial compensation coming from above.

The International Monetary Fund specified that it has employed law firm Morgan, Lewis & Bockius to carry out the probe. Strauss-Kahn is France’s former minister of finance. He took charge in September last year. Kahn allegedly had a sexual relationship with Piroska Nagy, who is the former division chief at the IMF. She left the Fund’s Africa department when rumors about her relationship with the director started to rise. She now is an economist at European Bank for Reconstruction and Development located in London. Nagy did not accept nor deny the affair in a brief interview held recently after her departure from the Multi lender organisation. She mentioned that she left “as part of the normal downsizing at the IMF.”

The results of the investigation are due by the end of this month according to an IMF spokesman. The investigation was reported by the Wall Street Journal yesterday.

Oct

10

IMF Warns of Far-reaching Effects of Finance Crisis

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The International Monetary Fund has warned that if the governments of major economies do not take co-ordinated measures to deal with the global finance crisis, its crippling effects could spill over to emerging markets.

In its Global Financial Report, the IMF forecast a gloomy picture for the world economy and declared that the situation had been brought on by the worst crisis in the “mature finance markets” since the Great Depression of the 1930s. Dominique Strauss-Kahn, the managing director of the fund emphasized that government initiative was the need of the hour, not only to restore confidence in the national markets but also to address the situation in a co-ordinated manner at the international level.

According to the IMF, the total amount of money lost by banks due to mortgage-related losses would reach $1.4 trillion. The banking sector has not only been devastated by its losses in markdown, but the recent collapse of stock markets and the freezing of the credit market has it even more difficult for them to raise fresh capital. Close on the heels of the IMF forecast, several central banks announced Wednesday that they were launching concerted efforts to cut interest rates.