Posted on May 27, 2010 by iMFdirect
By José Viñals
Financial supervisors often get a raw deal. They are the stodgy “buttoned-up” guys who stand in the way of innovation, the dyed-in-the-wool bureaucrats who resist change and meddle with markets. On the list of thankless jobs they rank somewhere between traffic wardens and tax administrators.
And yet, as the global financial crisis taught us, supervision is incredibly important. Countries with the same set of rules had very different experiences during the crisis. Why? There are clearly many reasons but one of them is “better supervision.” After all, rules are only as good as their implementation. In some countries, the financial supervisor became the unsung hero of the crisis. One might say “It’s hip to be square!”
Filed under: Financial Crisis, Financial regulation, Fiscal Stimulus, growth, IMF, Multilateral Cooperation, recession | Tagged: banking, financial sector supervision, legislation, regulation | 2 Comments »
Posted on May 25, 2010 by iMFdirect
By Masood Ahmed
In the midst of an early and uncertain economic recovery from the global crisis, countries in the Middle East and North Africa (MENA) region have been experiencing a sharp slowdown in the growth of credit to the private sector, by about 30 percentage points on average relative to precrisis peak rates.
For many sectors, firms, and households that depend on bank financing, this slowdown may be forcing them to scale back their spending plans, or to resort to scarce or costly alternative avenues for financing. Slow credit growth may therefore be constraining the strength of the recovery in the short run, in addition to limiting prospects for longer-term growth. Policymakers are understandably concerned.
Filed under: Economic Crisis, Economic research, Financial Crisis, IMF | Tagged: balance sheets, bank funding, bank profitability, capital losses, countercyclical policy, credit culture, credit demand, credit growth, Iran, Jordan, Kuwait, lending, liquidity, Morocco, nonperforming loans, private sector, Qatar, risk aversion, Saudi Arabia, supply side, UAE | 4 Comments »
Posted on May 18, 2010 by iMFdirect
By Anoop Singh
As I have highlighted in previous posts, Asia has been leading the global recovery and it is expected to continue doing so in the near term.
Not only has Asia’s rapid growth helped output return to pre-crisis levels relatively quickly, it has attracted large capital inflows into the region. Foreign capital has poured in, attracted by Asia’s strong fundamentals and bright growth prospects. Portfolio and cross border banking flows have rebounded sharply as financial conditions normalized.
Looking ahead, our growth projections suggest that Asia is expected to outperform advanced countries. As a result, the region is likely to continue to attract significant capital inflows, assuming that fallout from the euro zone sovereign debt crisis is contained and that the recent spike in global risk aversion abates.
Filed under: Asia, Economic Crisis, Economic research, Financial Crisis, IMF | Tagged: capital inflows, China, debt crisis, domestic demand, foreign investors, Hong Kong, infrastructure development, investment climate, labor market, price bubbles, property prices, risk aversion | 1 Comment »
Posted on May 12, 2010 by iMFdirect
By Anoop Singh
(Version in 中文 日本語 and 한국어)
I blogged last from China, and this week I am in India to present our latest Asia-Pacific Regional Economic Outlook in New Delhi. India is of course, along with China and some other countries, an important driver of the Asian recovery. And Asia in turn is leading the global recovery.
At the same time, the global recovery also influences Asia’s growth, given Asia’s high dependence on export demand and its growing integration with international financial markets. And the global outlook is subject to downside risks, which came to the forefront again last week in the form of developments in Europe and continue to be reflected in financial market volatility all across the world.
So, while recent Asian performance has been strong and the outlook remains relatively positive, we are not yet out of the woods.
Filed under: Asia, Economic Crisis, Economic research, Fiscal Stimulus, growth, IMF | Tagged: capital flows, China, Europe, fiscal policy, India, inflation, Japan | 1 Comment »
Posted on May 4, 2010 by iMFdirect
By Nicolás Eyzaguirre
Versión en Español
Not so long after the global financial crisis, the supply of foreign financing has become abundant, and cheap, for many emerging market countries. This sounds like good news for Latin America, and it is—creating opportunities for debt management, saving on interest paid to foreigners, and expanding opportunities for investment. But it also comes with a number of potential risks that need to be managed.
Our new Regional Economic Outlook for the Western Hemisphere takes an in-depth look at the risks arising from what we call “easy external financial conditions.” There we analyze how the more financially integrated economies of Latin America have responded to such conditions in the past, with comparison to countries of other regions. Our comparisons focus especially on a group of advanced economies—Canada, Australia and New Zealand, and Norway—that also are commodity exporters, as well as being inflation targeters with highly flexible exchange rates.
Filed under: Advanced Economies, Economic Crisis, Emerging Markets, growth, Latin America | Tagged: bond spreads, capital inflows, commodity exporters, credit booms, debt management, exchange rates, foreign financing, private spending, risk aversion | 4 Comments »
Posted on May 2, 2010 by iMFdirect
Greece announced May 2 it had reached agreement with the International Monetary Fund (IMF), the European Commission, and the European Central Bank (ECB) on a targeted program to stabilize its economy, become more competitive, and restore market confidence with the support of a €110 billion (about $145 billion) financing package.
Negotiators over the weekend wrapped up details of the package, involving budget cuts, a freeze in wages and pensions for three years, and tax increases to address Greece’s fiscal and debt problems, along with deep reforms designed to strengthen Greece’s competitiveness and revive stalled economic growth.
Here’s links to key documents and material about Greece:
Institute of International Finance reaction
Video: IMF mission chief on CNBC
Filed under: Economic Crisis, Europe, IMF, International Monetary Fund, Multilateral Cooperation | Tagged: eurozone, Greece, Greek debt, Merkel, Papandreou, Poul Thomsen, Trichet | 2 Comments »