Christine Lagarde, the head of the International Monetary Fund, has said the global economy is struggling and with progress being severely tested, adding there are signs it is losing ground and that the risks are rising.
She said Europe needs a comprehensive strategy to break a dangerous cycle of mounting tensions that keeps it stuck in crisis mode.
Financial sector reforms are essential she said, adding: "We stand at a crossroads. "Policymakers need to lay out a clear road map for how to finish the job - not just looking to the next five or 10 years, but looking to the next weeks and months ahead"
The IMF's head also called for European financial integration saying: ""Let me be clear: the heart of European bank repair lies in Europe. That means more Europe, not less."
Five years since the start of the financial crisis, further action to reform the global financial system is still badly needed, which means strengthening crisis management tools and the overall architecture of the system, she said.
It is understood finance ministers from across the Eurozone will hold a telephone conference to discuss a bailout for Spanish banks.
Angela Merkel said Europe was ready to act to ensure stability in the euro zone as Spain's credit rating was cut by three notches.
"We are ready to back the use of euro-area instruments" - Did Merkel just hint at a breakthrough for the banks?