Lagarde: No country's economy immune from rising risks

IMF head Christine Lagarde has said the world economic outlook is "gloomy" and no country is immune from rising risks. She said all nations, starting with Europe, needed to head off a crisis with risks of a global depression. "There is no economy in the world immune from the crisis that we not only see unfolding but escalating," she said. "It is going to be hopefully resolved by all countries, all regions actually taking action." Meanwhile, ratings agency Standard and Poor's downgraded 10 Spanish banks by applying new ratings criteria. And France's official statistics agency, INSEE, said that it expects the Europe's second-largest economy to fall into recession in the final three months of this year and the first quarter of 2012. France, Spain and Italy have been facing rising borrowing costs. Many investors fear one will be the next eurozone member to need a bailout. 'Require efforts' Speaking at the US State Department in Washington, she said global economic leaders now needed to take a rounded approach towards addressing monetary weaknesses, such as those underscored by the current eurozone debt crisis. "It is going to require efforts, it is going to require adjustment, and clearly it is going to have to start from the core of the crisis at the moment, which is obviously the European countries and in particular the countries of the eurozone." Ms Lagarde mentioned economic bright spots in Asia and Latin America, which she said had taken, with IMF help, steps during crises in the 1980s and 1990s to address weaknesses in their banking systems and their financial frameworks. "All those challenges that they faced in the days of the Asian crisis, of the Latin American crisis, have now served them well," Ms Lagarde said. On Thursday, a closely-watched survey suggested the downturn in the 17 economies that share the euro had eased slightly in December. The composite survey of thousands of firms by Markit showed a continued contraction - but at a slower rate than in November.