Recent volatility in global financial markets shows how rapidly risks can spill over from one economy to the next, the managing director of the International Monetary Fund said on Wednesday.
World stock markets and the currencies of many emerging markets have seen large swings since China's decision last month to devalue its currency.
Lagarde said the world economy was facing headwinds from China's rebalancing, Japan's slow growth, falling commodity prices and uncertainties surrounding higher U.S. interest rates.