Top finance professionals urged governments to complete reforms while the global economy is still showing solid growth, insisting that central banks should not be relied upon in the event of a new crisis.
“It would be very nice if the economies at large didn’t have to rely on the central banks yet again in order to resist the next shock,” Christine Lagarde, the managing director of the International Monetary Fund (IMF), said at a CNBC-hosted panel at the World Economic Forum in Davos Thursday.
“Which is why I think policymakers have to really take the right course of action when it comes to fiscal policies, when it comes to actually completing the reforms that some of them have undertaken but some of them have only just touched softly and need to go much deeper into,” she told CNBC’s Geoff Cutmore.
Central banks around the globe launched massive stimulus packages after the financial crash of 2008 and the subsequent debt crisis in the euro zone. The Federal Reserve, the Bank of England and the European Central Bank (ECB) were just some of the institutions that implemented unprecedented measures, such as lowering interest rates to record lows and buying up government bonds in vast quantities.