IMF: Room for ECB to act; crisis at critical stage (by William L. Watts)

FRANKFURT (MarketWatch) -- The International Monetary Fund on Wednesday said the European Central Bank must continue to play a crucial role in addressing a euro-zone debt crisis that has reached a "critical stage." At the conclusion of the IMF's annual review of the region's economy, IMF directors urged European officials to press ahead with plans to form a banking union as a first priority. They welcomed plans to use the region's rescue funds "flexibly" and said the ECB should continue to provide support, including through the continued provision of liquidity to the financial sector and securities purchases. They also said there was room for further monetary easing, "especially if downside risks to growth materialize, including through additional nonstandard measures in view of the impaired monetary transmission mechanism."