The International Monetary Fund warned global financial leaders today not to repeat the mistakes of the Great Depression and choke off emergency support for their economies too quickly, Reuters reported. In a document prepared for a meeting of Group of 20 finance ministers and central bankers in Scotland, seen by Reuters, the IMF said the global recovery was still fragile and dependent on the massive injections of public money around the world. "One of the key lessons from the experience of similar crises (such as the Great Depression and Japan in the 1990s) is that withdrawing policy stimulus too early can be very costly," the IMF paper said. Officials say currencies are not on the formal agenda but tension over the weakness of the dollar and China"s managed exchange rate was clearly playing on delegates" minds, with Japan saying it had never been in favour of a strong yen. G20 meeting host and British finance minister Alistair Darling told Reuters that policymakers would maintain their pledge to keep support in place until recovery was assured and also launch a new system of mutual checks to help rebalance world growth and prevent future crises. "I think we can reach agreement on firstly making sure we don"t remove support too early because the recovery is by no means established everywhere," he said.
