The International Monetary Fund has come out against President Obama’s economic recovery plan, saying that the plan lacks detail and a specific method of asset valuation, reports the Financial Times. Citing an IMF report released yesterday, the Obama administration’s plan to stabilize and revitalize the economy is insufficient in mapping out just how the U.S. plans on bringing banks back to full strength.
“Critical details concerning the valuation of distressed assets remain unclear,” according to the report. “The plan also does not address how severely undercapitalized or insolvent banks will be resolved…greater clarity on these issues will be critical to ensure the plan’s effectiveness.”
The report comes just two weeks before the Group of 20 summit on April 2, which will bring together 19 of the world’s largest economies as well as a representative for the European Union. The meeting, which will be held in London, will revolve around the goal of mending the damaged global economy.
Obama and Treasury Secretary Timothy Geithner have so far been vague about their intentions for removing toxic assets from bank balance sheets, with a limited speech by Geithner last month being roundly lambasted by critics.
In its report, the IMF predicts that the global economy will decline by 1 percent this year, the first contraction in 60 years. The IMF says that the global economy will not pull itself up without governments worldwide achieving a “decisive breakthrough” in resolving the crisis.