Posted on October 3, 2014 by iMFdirect
By Gaston Gelos and Nico Valckx
Shadow banking has grown by leaps and bounds around the world in the last decade. It is now worth over $70 trillion. We take a closer look at what has driven this growth to help countries figure out what policies to use to minimize the risks involved.
In our analysis, we’ve found that shadow banks are both a boon and a bane for countries. Many people are worried about institutions that provide credit intermediation, borrow and lend money like banks, but are not regulated like them and lack a formal safety net. The largest shadow banking markets are in the United States and Europe, but in emerging markets, they have also expanded very rapidly, albeit from a low base.
Filed under: Advanced Economies, Economic outlook, Economic research, Emerging Markets, Europe, Finance, Financial Crisis, Financial regulation, growth, International Monetary Fund, Investment, Politics | Tagged: banks, euro area, Financial Stability Board, GFSR, Global Financial Stability Report, interest rates, investment, shadow banking, United States | Leave a comment »
Posted on September 30, 2014 by iMFdirect
By Abdul Abiad, Davide Furceri, and Petia Topalova
Infrastructure is the backbone of well-functioning economies. Unfortunately, that backbone is becoming increasingly brittle in a number of advanced economies. For example, there has been a decline in the overall quality of infrastructure in the United States and Germany (Figure 1; see the FT 2014 and ASCE 2013 for more in infrastructure in the U.S., and Der Speigel 2014 and Kunert and Link 2013 for Germany). In many emerging market and developing economies, the expansion of the backbone has not kept pace with the broader economy, and this is stunting the ability of these economies to grow.
Filed under: Advanced Economies, Economic outlook, Economic research, Emerging Markets, growth, International Monetary Fund, Investment, Public debt, Reform | Tagged: Brazil, emerging market, Germany, India, infrastructure, investment, Macroeconomic policies, public investment, South Africa, taxes, the Philippines, United States, World Economic Outlook | Leave a comment »
Posted on September 22, 2014 by iMFdirect
Lurking conjures up images of spies, flashers and other dodgy types. The IMF’s chief economist Olivier Blanchard takes readers into the dark corners of the financial crisis in his latest article ‘Where Danger Lurks’ in our recent issue of Finance & Development Magazine, and looks at small shocks, sudden stops and liquidity.
Filed under: Advanced Economies, Economic outlook, Emerging Markets, Employment, Europe, Financial Crisis, Globalization, IMF, International Monetary Fund, Politics | Tagged: central banks, Finance & Development magazine, financial crisis, global economy, macroeconomic policy, Olivier Blanchard, United States | Leave a comment »
Posted on September 18, 2014 by iMFdirect
By Sweta Saxena
1. Are emerging markets slowing down? Yes. They have been slowing down for some time now. GDP growth has declined from 7 percent during the pre-crisis period (2003-8) to 6 percent over the post-crisis period (2010-13) to 5 percent, in our projections, over the next 5 years (2014-18). This path is illustrated below in Chart 1. This last point stands out. Despite an uneven recovery, growth in advanced economies is projected to eventually recover. Not so for emerging markets.
Filed under: Advanced Economies, Asia, Economic research, Emerging Markets, Finance, Globalization, growth, IMF, International Monetary Fund, Latin America | Tagged: Brazil, Central America, China, commodiity prices, emerging market economies, global trade, Russia, spillover effects, spillover reports, structural reform, Venezuela | Leave a comment »
Posted on September 15, 2014 by iMFdirect
By Steven Barnett and Shaun Roache
(Versions in 中文)
“Shadow” banking: a surprisingly colorful term for our staid economics profession. Intended or not, it conjures images of dark, sinister, and even shady transactions. With a name like “shadow banking” it must be bad. This is unfair. While the profession lacks a uniform definition, the idea is financial intermediation that takes place outside of banks—and this can be good, bad, or otherwise.
Our goal here is to shine a light on shadow banking in China. We at the IMF have used many terms. Last year, we had a descriptive one, albeit a mouthful—off-balance sheet and nonbank financial intermediation. The April 2014 Global Financial Sector Report (GFSR) called it nonbank intermediation. This year our China Article IV report used the term shadow banking.
Filed under: Asia, Economic research, Emerging Markets, Finance, Globalization, growth, IMF, International Monetary Fund | Tagged: bank credit, China, corporate bonds, emerging economies, Global Financial Stability Report, loans, shadow banking | Leave a comment »
Posted on September 8, 2014 by iMFdirect
By Era Dabla-Norris
Much of the debate on inequality focuses on its deleterious social and political effects and its impact on growth. But an equally important issue is what policies play a clear role in reducing income inequality.
The results of our new study suggest that improvements in education—even more than factors such as government expenditure or financial sector development—have contributed in an important way to reducing income inequality within countries.
Filed under: Advanced Economies, Economic research, Emerging Markets, Finance, Globalization, growth, Inequality, International Monetary Fund | Tagged: education, expenditure reform, income inequality, inequality, technology, United States | Leave a comment »
Posted on September 4, 2014 by iMFdirect
As you trudge back to the office or cubie with a little sand still crunching in your backpack, you know the holiday is over. To help you catch up, here are some blogs to re-read to get you back into the swing of things.
Remember Europe? I thought so. The European Central Bank is center stage this week as inflation in Europe has hit a trough, which reminded me of our blog about deflation back in March that rattled a few cages.
Which brings us to what will or won’t happen with global interest rates, and their impact on well, pretty much everyone. We’ve analyzed the tea leaves so you don’t have to.
Filed under: Asia, Economic Crisis, Economic research, Emerging Markets, Europe, IMF, Inequality, International Monetary Fund, Low-income countries | Tagged: China, deflation, Europe, European Central Bank, Fiscal Monitor, Global Financial Stability Report, IMF/World Bank Annual Meetings, inequality, interest rates, United States, World Economic Outlook | Leave a comment »