IMF told that amid 'new mediocre' no room for mistakes by central banks

Central banks have little room for error in a low-growth world in which over-leveraged and commodity-dependent emerging economies and a slowing China are major risks, top international financiers told the International Monetary Fund?s meeting.

Despite $7 trillion in quantitative easing from banks in industrial nations since the global financial crisis, the world is stuck in a ?new mediocre? growth pattern, IMF chief Christine Lagarde said on Oct. 8.

In a bid to shore up finances and punish companies that arbitrage tax regimes, governments pushed ahead with plans to improve tax collection.

The IMF meeting comes as the Bank of Japan looks poised to extend its money printing program, known as quantitative easing, as it stares down the barrel of a fifth year of recession.

The European Central Bank is also expected to extend quantitative easing, while the two major central banks closest to raising rates, the U.S. Federal Reserve and the Bank of England, are holding their fire.

?It is not the kind of economy in which you can make a mistake,? Bank of England Governor Mark Carney told the meeting.

For both the Fed and the Bank of England, inflation targets are far out of reach, although both central banks insist they are ready to hike rates. The Fed?s chair, Janet Yellen, has said the U.S. Federal Reserve (Fed) is on track to raise rates this year.

Markets, however, are not pricing in hikes until next year for both.

The IMF has urged the Fed and the Japanese and European central banks to wait for more signs of recovery before tightening. Lagarde on Oct. 8 repeated her plea to Yellen to stay her hand.

Emerging markets under scope

Many emerging markets, once the world?s fastest-growing...