Global financial crisis worsening

PARIS – The stunning collapse of US investment bank Bear Stearns shows the global financial crisis is more serious and more widespread than policy makers realised even a few weeks ago, the head of the International Monetary Fund said.

“The financial crisis which started in the United States is more serious and more global than it was a few weeks ago,” IMF Chief Dominique Strauss-Kahn said in Paris yesterday. “The risks and dangers are very high.The economic environment is still worsening.”US woes will impact other economies and will require a “global answer,” Strauss-Kahn said.JPMorgan Chase & Co’s acquisition of Bear Stearns for the shockingly low price of US$2 per share, or US$236.2 million, occurred Sunday night in a deal that was fast-tracked by the federal government to avoid a bankruptcy.A complete collapse of Bear Stearns might have crushed already-dwindling confidence in the global financial system, which has frozen up after last year’s collapse of the sub- prime mortgage market.Strauss-Kahn was speaking at a conference on structural reforms in Europe organised by the Organisation for Economic Cooperation and Development, or OECD.Nampa-AP”The risks and dangers are very high.The economic environment is still worsening.”US woes will impact other economies and will require a “global answer,” Strauss-Kahn said.JPMorgan Chase & Co’s acquisition of Bear Stearns for the shockingly low price of US$2 per share, or US$236.2 million, occurred Sunday night in a deal that was fast-tracked by the federal government to avoid a bankruptcy.A complete collapse of Bear Stearns might have crushed already-dwindling confidence in the global financial system, which has frozen up after last year’s collapse of the sub- prime mortgage market.Strauss-Kahn was speaking at a conference on structural reforms in Europe organised by the Organisation for Economic Cooperation and Development, or OECD.Nampa-AP