IMF: Global economy may face 'chronic' crisis

A growing trend towards excessive risk-taking and lack of action to repair broken bank balance sheets could trigger a "chronic" new phase in the financial crisis, the International Monetary fund has warned.

The IMF said that while near-term risks had abated in response to loose central bank policies, reforms to repair ailing banks were not yet complete and could pose a threat to future stability, particularly in Europe, the Telegraph reports. "While major UK and core euro area banks have been actively de-risking and deleveraging . . . more needs to be done to complete the repair of their balance sheets," the IMF said in its half-yearly Global Financial Stability Report. It came as Jens Weidmann, Germany's central bank chief, warned that Europe could take ten years to recover from the cri...