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

IMF ‘downplayed risk of financial crisis’


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.

Andrew Walker

IMF managing director Dominique Strauss-Kahn

IMF head Dominique Strauss-Kahn welcomed the report


Click to hear the 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


Click to hear the vocabulary:



very noticeable or unusual


things said or written to tell people about a possible danger


careful watching of something



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


helpful or positive actions or comments


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

emergency loans

lending of money which is desperately needed

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