As the Federal Reserve debates the timing of its first interest rate hike since 2006, International Monetary Fund (IMF) Managing Director Christine Lagarde is urging central banks to cooperate on policy moves.
“I know that this topic has some very vocal skeptics, but also very ardent supporters,” Lagarde said at the European Central Bank (ECB) Forum on Central Banking in Sintra, Portugal late Sunday.
“As the crisis has taught us, in times of distress, the potential gains from cooperation can be huge. Cooperation essentially reduced the risk of tail events with large international feedback effects,” she added. The Fed and the Bank of England are expected to start raising interest rates in 2015.