Finance officials from the Group of 20 nations, the International Monetary Fund and the World Bank are scheduled to meet this week in Washington, D.C. The gathering comes amid concerns about growth in emerging economies, the U.S. recovery and Europe's sovereign-debt crisis. "The risks remain high, the situation fragile," IMF Managing Director Christine Lagarde said.
Austria's banking regulators are working to reinforce the strength of the nation's biggest banks. Officials hope several initiatives will prevent the financial institutions from requesting taxpayer funds to survive Europe's sovereign-debt crisis.
Investors started questioning credit ratings of other debt-ridden nations after Standard & Poor's downgraded the US rating, causing credit default swaps on France's debt to surge. "The US downgrade should also make markets wary about the weaker AAA countries, of which France is undoubtedly one," said RBC Capital Markets strategists.
Support is building among European leaders to select French Finance Minister Christine Lagarde to replace Dominique Strauss-Kahn as managing director of the International Monetary Fund. Swedish Finance Minister Anders Borg said Lagarde is "one of the obvious candidates" because of her leadership in global financial coordination and managing Europe's sovereign-debt crisis. Government officials throughout Europe have privately expressed support for her.
EU leaders agreed to strengthen the European Financial Stability Facility, but they are struggling to decide how. Officials had discussed using this week's summit in Brussels to come to a consensus, but that appears unlikely. Their failure to decide could undermine market confidence and possibly lengthen Europe's sovereign-debt crisis.