Public Intervention Needed to Tackle Credit Crunch

The need for public intervention to tackle the credit crunch was "becoming more evident" than ever, International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn said on Monday.

In an interview with the Financial Times, he said global regimes have so far injected liquidity into markets, but aside from bailing out failing institutions, they have not intervened in the financial systems per se.

Strauss-Kahn added that the securities market and housing sector should get more support from governments and central banks alongside more intervention in the banking sector.

"Such a move would offer a third line of defence", he told the newspaper.

By Gaurav Sharma and edited by Nancy Girgis