IMF warns of fresh financial crisis

Urgent action to sort out eurozone banks called for in financial stability report warning market turmoil may recur

The International Monetary Fund has highlighted risks of a new financial crisis, warning that global output could be cut by 4% over the next five years by a repeat of the market mayhem witnessed during the 2008-09 recession.

The IMF used its half-yearly global financial stability report to call for urgent action on the problems of banks in the eurozone, a third of which it said faced "significant challenges" to be sustainably profitable.

Related: IMF homes on the eurozone's weakest link: Italy