IMF chief Lagarde calls on governments to build a new multilateralism

International Monetary Fund (IMF) managing director Christine Lagarde has called on governments to build a new multilateralism that included cities and companies in an effort to address challenges such as widening income disparity, Bloomberg reports.

The IMF chief said in a speech in London yesterday that while policy makers' immediate priority was to tackle high debt levels or weak banking systems following the 2008 financial crisis, they also needed to address longer-term challenges, which meant adjusting to a growing and ageing population, overcoming global warming and reducing income inequality, she said.

She added, the kind of 21st-century cooperation she was thinking of would not come easy, according to her prepared remarks for the British Broadcasting Corp's Dimbleby lecture, according to the report. She said given the currents that would dominate the coming decades, there really was no choice and a new multilateralism was non- negotiable.

As competition for global capital intensified with the Federal Reserve's paring of monetary stimulus, according to Lagarde, the world needed a close relationship between monetary institutions, which need to be mindful of the potential impact of their policies on others.

Meanwhile, though central banks in Turkey, India and South Africa increased rates in a bid to stem a 3 per cent selloff last month in emerging currencies, the move failed to produce the desired result, PTI reported.