Global Financial Stability Risks Increasing Amid Market Turmoil - IMF Chief

The recent shocks in the global economy have further undermined financial stability, International Monetary Fund (IMF) Managing Director Christine Lagarde said in a lecture at Goethe University in Germany.

WASHINGTON (Sputnik) — IMF Managing Director Christine Lagarde pointed out that the global economic outlook has weakened further over the last six months.

"Global trade has slowed and financial stability risks have increased—with the recent market turmoil partly reflecting lower confidence in the effectiveness of policies," Lagarde stated on Tuesday.

The IMF chief noted that the risk of instability is exacerbated by political risks in addition to such problems as terrorism and the refugee crisis.

"There has been a loss of growth momentum," she observed. "The risk of becoming trapped in what I have called a ‘new mediocre’ has increased."

Lagarde also said the slowdown was exacerbated by the slowdown in the Chinese economy and lower commodity prices, along with potential financial tightening in many countries.