Posted on August 11, 2009 by iMFdirect
By Ajai Chopra
Resolving any financial crisis is no easy matter. Resolving the ongoing international crisis—with many institutions, countries, and regulators involved—is unusually challenging, both intellectually and in terms of practical policymaking.
Progress has been made thanks to the slew of measures adopted by global policymakers. But a stabilized patient is not a cured patient, particularly when stabilization largely reflects significant shifts of risk from the private financial sector to the public sector. And the early reappearance of practices thought to have played a part in fueling the crisis—sizeable bonuses, for example—is troubling.
Filed under: Advanced Economies, Economic Crisis, Financial Crisis | Tagged: Banking crisis, Sweden | 1 Comment »
Posted on August 10, 2009 by iMFdirect
By Ajai Chopra
Mervyn King, the Bank of England governor, once quipped that central bankers aim to keep monetary policy “boring”—a dull exercise in maintaining low and stable inflation. Recent months have seen quite the opposite.
Battling a sharp fall in inflation, central banks around the globe have slashed interest rates, often to close to zero. Several have also made headlines by adopting unconventional policies, including “quantitative easing” at the Bank of England (BoE) and “enhanced credit support” at the European Central Bank (ECB).
Filed under: Advanced Economies, Economic Crisis, Financial Crisis, Fiscal Stimulus | Tagged: Europe, European Central Bank, IMF, Mervyn King, the Bank of England | 1 Comment »
Posted on August 5, 2009 by iMFdirect
By Caroline Atkinson
After averting a second Great Depression, what should policy makers do to foster recovery?
Economic policymakers are rarely popular. Central bank governors are notorious for removing the punch bowl at the party. Ministers of finance are traditionally the ones who say no to their colleagues’ pet spending projects.
In the upside-down world of recent months, finance ministers and central bank governors around the world seemed to have switched sides. They became cheerleaders for expansionary policies. The IMF has argued strongly for this, as long as countries had room to take on more debt. Despite some hiccups, it seems clearer with every economic release that the extraordinary actions governments have taken have paid off, at least in halting the slide. Economic prospects may not be quite as bright as recent market moves would suggest. But the risk of spreading financial collapse has lessened markedly.
Filed under: Economic Crisis, Financial Crisis, Fiscal Stimulus, Multilateral Cooperation | Tagged: cooperation, deficits, expansionary policies, Fiscal Stimulus, GFSR, monetary stimulus, sustainable recovery | 1 Comment »
Posted on August 3, 2009 by iMFdirect
By Caroline Atkinson
Welcome to iMFdirect, the International Monetary Fund’s new blog.
The global economy has pulled back from the brink. Financial systems are beginning to function more normally. The panic that threatened to spread among depositors and savers earlier this year has receded. But enormous economic challenges remain, challenges that are often global in scope and may require a global response.
It is against that background that economists and policymakers at the International Monetary Fund are now preparing for the IMF-World Bank Annual Meetings in early October. And as we do that, we wanted to open up our work to a broader audience. In coming weeks, senior staff and IMF management would like to discuss with you, through this blog, some of the key issues.
Filed under: Advanced Economies, Annual Meetings, Economic Crisis, Financial Crisis, Fiscal Stimulus, IMF, International Monetary Fund, Low-income countries | Tagged: G-20, global economy, Istanbul, London Summit, new blog, recovery, Turkey | 1 Comment »