UPDATE 1-IMF’s Lagarde says G20 should focus on policy spillovers – Reuters

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By David Lawder

WASHINGTON Feb 19 IMF Managing Director
Christine Lagarde said on Friday that G20 finance ministers and
central bank governors should focus on global economic
spillovers from their policy decisions when they meet in
Shanghai next week.

“The G20 I think, is going to have to focus on spillovers,
on spillbacks and on the combination of various policies in play
at the moment,” Lagarde told reporters after she was re-elected
to a second five-year term as the crisis lender’s leader.

Lagarde said that at the moment, the “asynchronicity” of
U.S., Japanese and European monetary policies needed to be
reviewed and practices better coordinated. She also said that
G20 ministers should examine the interactions of their
countries’ fiscal policies and structural reform moves.

By better coordinating these policies, the major economies
can improve market confidence and limit the spillovers on the
rest of the IMF’s 188 member countries, she said. Currently,
many oil- and commodity-exporting countries are experiencing
financial difficulties as the Chinese economy slows.

“Are we in a 2009 moment, I don’t think so. Are we in a
moment where coordination is needed? Yes,” Lagarde said,
referring to the deepest part of the recent financial crisis and
widespread recession.

G20 finance ministers and central bank governors will meet
in Shanghai on Feb. 25 and 26 amid markets roiled by cheap oil
and commodity prices and uncertainty over China’s growth rate.

Lagarde added that China’s transition to a more
consumer-driven economy “will not be a walk in the park” and
will bring economic difficulties and turbulence, but that she
believed Chinese leaders understood their influential place in
the global economy as they make restructuring decisions.

She said she has urged Chinese leaders to communicate their
policy intentions more clearly.

“What is critical, for one, is a good and solid
communication. This is something that I have said before and
this is something that I believe is being heard” by Beijing,
Lagarde said.

The former French finance minister, 60, was the only nominee
as the IMF’s chief for the five-year term starting July 5. She
was re-elected by board consensus.

(Reporting By David Lawder; Editing by Andrea Ricci)

UPDATE 1-IMF’s Lagarde says G20 should focus on policy spillovers – Reuters