Worst of financial crisis may lie ahead, IMF head warns

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CAIRO, Sept 17 (AFP): The global financial crisis is not over and more banks could close, possibly leading to the disappearance of independent investment houses, International Monetary Fund (IMF) chief Dominique Strauss-Kahn told the news agency.
"The fact that a certain number of banks in the United States are restructuring shouldn't lead to panic," he said in an interview in the wake of Monday's collapse of major US investment bank Lehman Brothers.
"But these events add to the uncertainty, and financial tensions cannot be excluded in the short term," with banks other than Lehman Brothers also in a bad position, he said.
Predicting "a narrower global financial sector", the IMF managing director said certain "players will disappear", particularly in the United States, with the possible gradual disappearance of independent investment banks like Lehman or Merrill Lynch.
Lehman Brothers was seen in financial markets as one of the big four United States investment banks, along with Morgan Stanley, Goldman Sachs and Merrill Lynch, which announced Monday it is to be taken over by Bank of America in a 44 billion dollar deal.
"We are facing an unprecedented financial crisis," Strauss-Kahn said, because it stems from "the heart of the system," the United States, and not from its "periphery" and has affected the whole world simultaneously.