IMF Says Financial Turmoil Now "Full Blown Crisis"

By: • Thu, Oct 2 2008, 1:38 PM

According to a first glance of the IMF's Global Economic Outlook, the financial turmoil has now been upgraded to a "full blown crisis", and strong action will be needed to counter it.

There is a substantial likelihood of a severe economic downturn in the United States, although Europe may be partially insulated against further shocks.

As a consequence, the IMF called on governments across the globe to take strong action to "deal with the stress and support the restoration of financial system capital."

In an interview with Reuters on Sept. 30, IMF Managing Director Dominique Strauss-Kahn said the U.S. Congress must act urgently and approve the $700 billion rescue package. He said even if the plan is not perfect, it's better than nothing.

Strauss-Kahn also said Europe needs to develop a plan for its own financial crisis.