Within 24 hours of American investment banker Lehman Brothers filing the largest bankruptcy in the United States' history, International Monetary Fund said that the financial crisis may continue at least in the short run.
"The speed and scale of these events have added to short term uncertainties and further significant financial strains cannot be ruled out," IMF's first deputy managing director John Lipsky said, responding to media inquiries.
The statement of IMF comes in the wake of 158-year-old Lehman Brothers filing for Chapter 11 bankruptcy protection, after losing around $60 billion in the sinking real-estate market, and another investment bank Merrill Lynch bought over by Bank of America for $50 billion.
The world's largest insurer American International Group (AIG) is also facing financial crisis.
The Dow Jones industrial average fell more than 4 per cent since the day the stock market reopened after the September 11 attacks. Indian stock markets lost 469.54 points on account of the carnage in the Wall Street.
Lipsky said the present consolidation is necessary for restoring the efficacy of the sector.
"The weekends developments should be seen in the context of a financial sector restructuring and consolidation. This is a necessary condition for restoring the sector's effectiveness," he said.
On Monday in Cairo, Egypt, the head of IMF Dominique Strauss-Kahn had said the consequences on the financial sector are not over.