"You never recover until you clean up the balance sheets of the banks. This has not been completely done," he told a World Trade Organization conference in Geneva, Switzerland. Strauss-Kahn noted that central banks have acted decisively with measures to mitigate the financial crisis, and governments have also responded to the IMF's call in early 2008 for 2 percent of gross domestic product to be spent on a global stimulus to kickstart the economy.
However, he noted that there remained a missing link to recovery - banks' efforts to clean up their balance sheets. " Depending on the speed of the cleaning of balance sheets of the financial sector, recovery will come sooner or a bit later," he added.
In April, the IMF projected the global economy would shrink 1.3 percent in 2009, and that growth would come in 2010, but at a sluggish rate of 1.9 percent.