IMF’s Lagarde doesn’t rule out another global financial crisis

IMF’s Lagarde doesn’t rule out another global financial crisis
Another financial crisis is still possible, according to International Monetary Chief Christine Lagarde. She was commenting on a statement by US Federal Reserve Chair Janet Yellen, who predicted she would not see another financial crisis in her lifetime.

"There may, one day, be another crisis. I plan on having a long life, and I hope she (Yellen) does, too, so I wouldn't absolutely bet on that because there are cycles that we have seen over the past decade and I wouldn't exclude that,” Lagarde told CNBC on Tuesday.

She said that crises are usually unpredictable and come unexpectedly.

"Where it will come from, what form it takes, how international and broad-based it will be is to be seen, and typically the crisis never comes from where we expect it," Lagarde said.

"Our duty … is to make sure that your financial sector is under good supervision, that it's well regulated, that the institutions are rock-solid, and anticipate at home with enough buffers so that you can resist the potential crisis," she added.

The previous global financial crisis took place in 2007-2008 and is considered the biggest economic downturn since the Great Depression.

It happened after the crash in the US housing market, and massive amounts of mortgage-backed securities and derivatives lost significant value. In the US alone, more than 7.5 million people lost their jobs. According to estimates, American households lost roughly $16 trillion in net worth as a result of the stock market plunge.