The managing director of IMF visits Wharton
Antonio Moreno-Hernando, Enrique Peña, Jaime Falcones
Issue date: 4/2/07 Section: News
- Page 1 of 2 next >
The Wharton Leadership Lectures recently hosted Rodrigo de Rato, current Managing Director of the IMF and former Vice-president of the Government and Minister of Economy in Spain. The Wharton Auditorium was absolutely packed with full-time MBA students, Executive MBA students and undergrads, as well as students from the rest of UPenn. The attendees participated actively in the question and answer portion and the total lecture lasted an hour and a half. The lecture focused on the new challenges that changes in financial risks are currently posing to the IMF, governments, and individuals.
According to the head of the International Monetary Fund, the global economy is still on track for healthy growth despite the adverse impact on US business prospects of a housing slump and skittishness about risky mortgages. Regarding the implications of financial markets into the world economy, Rato pointed out three developments as having the most concerns for the IMF: the emergence of a new source of risk from the recent increase in large private equity buyouts financed by a rising proportion of debt, the very substantial flows of capital into emerging markets, and the already mentioned problems in sub-prime mortgage markets in the United States.
The international lending institution expects worldwide economic growth for all of this year to clock in at close to five percent. "This would be the strongest five-year span for the global economy since the late 1960s," he [Rato] said during the lecture. Even though economic growth in the US - the world's largest economy - is slowing, business growth in other parts of the world is moving ahead, he highlighted.
"In the Euro area, growth momentum looks solid," Rato said. "Japan seems to have regained its footing. China and India continue to be engines of growth." The recent turbulence in financial markets in the US and abroad reflected a reappraisal of risk as investors contemplated, among other things, the odds of an economic slowdown in the US, problems in the country's mortgage market, and risks in currency trading involving the yen. Those were some of the factors behind the February 27 swoon in stock markets.
According to the head of the International Monetary Fund, the global economy is still on track for healthy growth despite the adverse impact on US business prospects of a housing slump and skittishness about risky mortgages. Regarding the implications of financial markets into the world economy, Rato pointed out three developments as having the most concerns for the IMF: the emergence of a new source of risk from the recent increase in large private equity buyouts financed by a rising proportion of debt, the very substantial flows of capital into emerging markets, and the already mentioned problems in sub-prime mortgage markets in the United States.
The international lending institution expects worldwide economic growth for all of this year to clock in at close to five percent. "This would be the strongest five-year span for the global economy since the late 1960s," he [Rato] said during the lecture. Even though economic growth in the US - the world's largest economy - is slowing, business growth in other parts of the world is moving ahead, he highlighted.
"In the Euro area, growth momentum looks solid," Rato said. "Japan seems to have regained its footing. China and India continue to be engines of growth." The recent turbulence in financial markets in the US and abroad reflected a reappraisal of risk as investors contemplated, among other things, the odds of an economic slowdown in the US, problems in the country's mortgage market, and risks in currency trading involving the yen. Those were some of the factors behind the February 27 swoon in stock markets.
Be the first to comment on this story