IMF concern for global economy

The global economy has a long road to recovery - that's the verdict from the head of the International Monetary Fund (IMF).

Speaking in Japan, Christine Lagarde said the outlook was worrying, as developed and emerging nations showed signs of slowing down.

She called for more reform in the banking sector to aid recovery.

SOUNDBITE: INTERNATIONAL MONETARY FUND (IMF) MANAGING DIRECTOR CHRISTINE LAGARDE, SAYING (English):

"Banking institutions, financial institutions in general have to concentrate on what is their core business, which is to finance the real economy. They have to be supporting, not destabilising the economy, back to function instead of dysfunction, back to service, and not exclusively profit, forgetting about service."

Lagarde welcomed growing cooperation in Europe to tackle the debt crisis.

But she said a solution could only be found with closer integration on a regional level.

SOUNDBITE: INTERNATIONAL MONETARY FUND (IMF) MANAGING DIRECTOR CHRISTINE LAGARDE, SAYING (English):

"From the IMF perspective, we believe more has to be done to really complete the architectural job of the euro zone. A monetary union, a banking union, followed by a fiscal union."

China, the euro zone and Britain have all loosened monetary policy in a sign of growing alarm over the health of the global economy.

Lagarde said the IMF will downgrade some economic forecasts later this month in the face of deteriorating data.

Sarah Charlton, Reuters.