This page has been archived and is no longer updated. Find out more about page archiving.

Last updated at 18:21 GMT, Friday, 11 February 2011

IMF ‘downplayed risk of financial crisis’

Summary

11 February 2011

An investigation of the International Monetary Fund concluded that the institution downplayed the risks faced by the world economy before the 2008 financial crisis. The enquiry was carried out by the IMF’s Independent Evaluation Office.

Reporter:
Andrew Walker

IMF managing director Dominique Strauss-Kahn

IMF head Dominique Strauss-Kahn welcomed the report

Listen

Click to hear the report:

Report

The report includes some striking criticism of the IMF's performance ahead of the crisis. The agency provided few clear warnings about the risks, the report says.

IMF surveillance of the economic situation was characterised by over-confidence in the soundness of large financial institutions. The risks associated with housing booms and financial innovations, subsequently called toxic assets, were downplayed.

The IMF's managing director Dominique Strauss-Kahn welcomed the report, which he said puts forward many constructive ideas and is consistent with the Fund's own analysis.

The IMF has had a central role in responding to the crisis, with emergency loans and other assistance for some countries. The IMF has a continuing role in dealing with the financial problems in the Euro area, where it is providing loans to both Ireland and Greece.

Andrew Walker, BBC News

Listen

Click to hear the vocabulary:

Vocabulary

striking

very noticeable or unusual

warnings

things said or written to tell people about a possible danger

surveillance

careful watching of something

soundness

stability

housing booms

times when a lot of houses are being built and sold for high prices

toxic assets

investments backed by risky mortgages that are held by large banks, and that have lost value, dragging down banks' balance sheets

puts forward

suggests or presents

constructive

helpful or positive actions or comments

consistent

behaviour or actions which are the same over a period of time

emergency loans

lending of money which is desperately needed

  1. Home
  2. Grammar, Vocabulary & Pronunciation
  3. Words in the News
  4. IMF ‘downplayed risk of financial crisis’