IMF chief: World financial sector to shrink

CAIRO-EGYPT: The head of the International Monetary Fund predicts the global financial sector will ``shrink'' due to the current international credit crisis.

IMF Managing Director Dominique Strauss-Kahn says world financial sector will be ``entering a consolidation phase'' because of the crisis that has rocked credit instituitions globally.

He also predicted the disappearance of independent investment banks that are separate from larger institutions. Strauss-Kahn spoke Monday in Cairo following meetings with Egyptian officials to discuss challenges to the country's economic reform plans.

Investment banks Lehman Brothers and Merrill Lynch ceased to exist as independent institutions Monday due to the 14-month credit crisis in the US.