FLATWIRE: IMF Chief Lagarde Says World Entering 'Dangerous New Phase' (Catherine Boyle)

Sept. 9, 2011 (CNBC) -- Christine Lagarde, the managing director of the International Monetary Fund, warned Friday ahead of the G7 summit in Marseilles, France, that the global economy is entering a "dangerous new phase."

She warned that both advanced and emerging economies faced key economic challenges, and that governments must "act now" to stop further contagion.

"Policymakers should stand ready, as needed, to take more action to support the recovery, including through unconventional measures," Lagarde said.

"The world is collectively suffering from a crisis of confidence, in the face of a deteriorating economic outlook and rising concerns about the health of sovereigns and banks."

READ MORE: CNBC