Monday, 1 October 2007
Dominique Strauss-Kahn says that the slowdown in the US sub-prime mortgage market should not have a dramatic impact on the world economy.
Mr Strauss-Kahn was giving his first news conference since being named as the next head of the International Monetary Fund (IMF) on Friday.
"I think the situation is now under control," the socialist former French finance minister said.
"The bases of world growth today are solid bases," he added.
Sub-prime mortgages are offered to homebuyers with low incomes or poor credit records.
There have been record defaults on them in the US as rising interest rates and falling house prices have caused problems for borrowers.
The defaults have raised questions about the value of debt that has been passed around the banks.
The former head of the Federal Reserve, Alan Greenspan, predicted on Monday that the sub-prime crisis would lead to, at best, an economic slowdown and more likely a recession in the US that would have knock-on effects worldwide.
Renewed criticism
Mr Strauss-Kahn will take over as managing director of the IMF on 1 November.
The IMF is a multinational body charged with giving financial aid and assistance to developing countries to secure global financial stability.
His appointment renewed criticism of the system under which Europe gets to choose the head of the IMF while the US chooses the boss of the World Bank.
Describing himself as a "free-market socialist", he said that he would gear policy to meet the needs of emerging and low-income economies.
Some of those countries have complained that the IMF is too dominated by rich countries and that the conditions they place on their loans are too strict.
Mr Strauss-Kahn said he had travelled 100,000km (60,000 miles) to convince many of the IMF's 185 member countries that he had a workable plan for the future of the institution.
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