World leaders must act decisively to manage through a "dangerous new phase," Christine Lagarde, Managing Director International Monetary Fund said Thursday in Washington, DC.

"Exactly three years after the collapse of Lehman Brothers, the economic skies look troubled and turbulent as global activity slows and downside risks increase," she warned. "Without collective resolve, the confidence that the world so badly needs will not return."

She welcomed this morning's announcement that the European Central Bank will conduct three new dollar liquidity operations in cooperation with the Federal Reserve, Bank of Japan, and Bank of England.

On a more fundamental level, public spending must be cut and tax bases must be expanded, she added later in an interview on CNBC.

Lagarde, who took over as head of the IMF this summer, said global growth is slowing down. The IMF will reveal a more detailed assessment of the global economic outlook next week.

RTTNews