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Let's move on back to Christine Lagarde at the IMF earlier today I got an exclusive interview with the managing director -- -- we discussed everything from where the next Cyprus.
The next crisis in Europe might be to the US housing market they just came out with a brand new report right here on the US specifically focused on it.
I started by asking her how US big financials the eighteen biggest names.
Will hold up once the Fed starts tapering off its bond buying program here's what she had to say about American banks.
You told him I'm the -- Financial institutions still -- the big ones because that cold.
In of this financial institutions have been strengthened so much since the beginning of the financial crisis they have been significantly re capitalized.
They are on the very serious say the regular controlled by the -- There will supervised.
And and -- they've -- they all operators that will.
The that the movements on the market depending on how the -- takes place every.
In place unless we start to see any talk from the Fed about when they will taper the markets take a hit.
So that's why we ask we are concerned about that and then on top of that brings us to the Euro zone.
Course we made it through the Cyprus crisis of the question becomes is there another Cyprus.
Around the corner I wouldn't point.
To any particular country because clearly.
An economic region of the world that is under strengthening and deserve -- architecture ring.
And thought process is well under way they have abdominal pull within the last three years.
Rebuild their defenses they didn't have the final three other advocate to that they -- -- -- they not have a final.
They didn't have a European banking union.
They are in the process of building it but the moment they will have soon the European.
Common supervisor -- all of the financial institutions.
They have to continue to move to have to continue to strengthen the -- and and they have to.
You know supports the programs that -- in place of the moment in countries like Cyprus like Greece like Portugal and like on and those of the full countries.
Within the Euro -- but need constant attention.
Both in terms of what they do at home and how well -- supported from the apartment.
You just use the word support -- Germany of course is front and center through all of this because they are sort of the best actor fiscally momentarily.
They're -- of course because they feel that they're the chief head of the bailout situation and now it's gone all the way to German courts.
And in fact as it moves to look at what exactly is legal in Germany the question becomes -- effectively if the German courts rule.
And argue that recent moves by the ECB.
Are not legal at least from a -- standpoint.
Does this effectively kill the EU resolution package and rescue package could it ultimately lead to a break up of the European Union.
I think the defendant if you European institutions and eurozone institutions.
Are of the jurisdiction of you roll.
-- an all European institutions as well.
And what we see in terms of European monetary policy is that the OM TV I'll fight wanna trade -- program.
Has been unbelievably efficient although it does not been used it has been articulated that it has been very about communicated but it does not been used.
Could be appreciate that was we -- in any shape of.
To increase as we finish up here the -- -- -- -- recently said you know what we did bend the rules and we shouldn't have when it came to making sure that the -- was appropriately viewed.
In retrospect was -- -- the -- would you continue to do things like that took a look forward if -- any other countries have fallen to a creek like pets.
You know those reports are intended to to learn from past experience and to avoid a repeat of unsuccessful.
Devices all program.
And that complicates -- -- post because you put today's.
And look at yesterday's situation.
If who -- yesterday's situation where the eurozone did not have a firewall.
I think who would probably -- putts to recommend the same thing.
-- Having recommended something different might have exposed the -- eurozone which was a much bigger gamble.
Done addressing a country program appropriate keep buying the standards.
We did not.
You know break any rules we applied the rules with a specific.
Concerning Greece which was approved by the institution which was approved by the board.
And the IMF is known to be.
Very -- driven.
So anything that could do his approved by the boards and we -- also known for.
Revisiting -- what we do and drawing lessons they learned.
Learn from each mistake and finally your presiding over one of the most important times in our history when it comes to all of the the situations that are going on do you think.
That the problems in Europe will be a significant drag on the United States and its recovery.
It's it's it's one of the potential risks on the horizon but not risk was very pregnant very.
-- Buck a year ago because.
Reduced over time and all we hope is that the Europeans will continue to strengthen those -- And to get out of the current growth situation which is which is not satisfactory for them either.
All right that's Christine -- -- the IMF managing director and a Fox Business exclusive --
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