IMF calls for coordination to fight global financial crisis

WASHINGTON, Oct. 11 (Xinhua) -- The International Monetary Fund(IMF) Saturday called for international coordination to restore global financial stability.

The depth and systemic nature of the ongoing crisis requires "exceptional vigilance, coordination, and readiness to take bold action," the IMF's policy setting panel the International Monetary and Financial Committee(IMFC) noted in a communique following its regular meeting.

A view of the International Monetary and Financial Committee meeting during the annual IMF-World Bank meeting in Washington October 11, 2008.

The IMF has a critical mandate to foster the multilateral cooperation needed to restore and safeguard international monetary and financial stability, said the IMFC.

The committee called for further intensive IMF engagement across the membership to discuss and develop robust policy response to the crisis.

Moreover, the committee noted that many emerging market economies, which have implemented sound policies in recent year, "may experience spillover effects from the financial crisis."

"The difficult global financial environment, including elevated food and fuel prices, adds to the challenges for emerging markets and developing countries to preserve macroeconomic stability, sustain growth, and make progress on poverty reduction," said the committee.

"For these reasons, it is critically important that collaborative action be coordinated between advanced and emerging economies," it stressed.

The committee said that it "strongly endorses" the plan of action approved Friday by a group of seven(G-7) major developed countries -- the United States, Japan, Britain, Germany, France, Italy and Canada -- to fight the global credit crisis. The plan was included in the communique.

Under the plan, the G-7 will take decisive action and use all available tools to support systematically important financial institutions and prevent their failure.

It will also take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding.

It will ensure that banks and other major financial intermediaries, as needed, can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses.

Meanwhile, members of the group will ensure that "our respective national deposit insurance and guarantee programs are robust and consistent so that our retail depositors will continue to have confidence in the safety of their deposits."

In addition, the G-7 will "take action, where appropriate, to restart the secondary markets for mortgages and other securitized assets."

According to the communique, the next regular meeting of the committee will be held in Washington D.C. on April 25, 2009.