'Act Now' Urges IMF Head, Warning of Recession Risks

IMF head Christine Lagarde warned that the world economic recovery is in danger, and called for additional spending to support growth, at a conference for business and economic leaders in Jackson Hole on Saturday, reports Reuters. "The stakes are clear; we risk seeing the fragile recovery derailed. So we must act now," she warned, saying that "the risk of recession outweighs the risk of inflation."

Lagarde said she preferred "mandatory substantial recapitalization" to come from private spending, but government spending was possible, too, if necessary. "Put simply, macroeconomic policies must support growth." For Europe, Lagarde said that the key was building confidence, through better financial rules and supporting European banks. For the United States, she recommended programs to reduce homeowner debt. (More IMF stories.)