The consequences of the global financial crisis have not yet fully manifested, and there could be new consolidations in the financial sector, said Dominique Strauss-Kahn, the Executive Director of the International Monetary Fund, on Monday.
"I cannot assert that the worst part of the financial crisis is over. The consequences of the financial crisis have not yet fully manifested. However, the root of the problem is far behind us," Strauss-Kahn said at a press conference. Global central banks reacted on Monday with capital injections into the world financial markets amid a sharp decline in stock markets and a significant drop in the dollar, following news that the American investment giant Lehman Brothers filed for bankruptcy with a restructuring and the sale of Merrill Lynch – both Wall Street giants previously considered too big to fail."There will likely be consolidation in the financial sector," Strauss-Kahn further stated. "After the crisis, the financial sector will shrink." However, he emphasized that the global economy has proven to be more resilient than expected and could recover by 2009. "The IMF expects a global recovery sometime in 2009," he said. He also anticipates a pullback in commodity prices from this year’s high levels, as well as a recovery in prices in the American real estate market. (H)
