10/14/2013 08:05 am ET Updated Dec 06, 2017

IMF's Lagarde: U.S. Default Could Lead To Another Global Recession


International Monetary Foundation boss Christine Lagarde has warned that if the US defaults on its debts the world could be tipped into another global recession.

In a US TV interview Lagarde said: "If there is that degree of disruption, that lack of certainty, that lack of trust in the US signature, it would mean massive disruption the world over and we would be at risk of tipping yet again into recession."

The US Treasury will start to run short of funds on Thursday if no agreement is reached for it to raise its debt limit, with much of the country's government workers still in 'shutdown'.

Talks between Democrats and Republicans began over the weekend but reports indicate they are a long way from reaching an agreement.

Republicans refused to approve the new budget unless President Obama agreed to delay or eliminate funding for his so-called 'Obamacare' health reform bill, passed in 2010. Congress missed its October 1 deadline for budget approval.

Lagarde's comments chime with World Bank President Jim Yong Kim, who warned that the US is "days away from a very dangerous moment".



2013 Government Shutdown