Posted on June 20, 2011 by iMFdirect
By José Viñals
(Versions in عربي, 中文, Español, Français, Русский)
It was fitting that I should present our latest assessment of global financial stability in Sao Paulo, the financial center of one of the leading emerging economies. In common with many of its peers in Latin America, Brazil is recovering strongly from the crisis. But new financial stability challenges are emerging in this, and other fast-growing regions.
Let me start with three key messages:
- First, financial risks have increased since April.
- Second, as a result, policymakers in both advanced and emerging economies need to step up their efforts to preserve financial stability and safeguard the recovery.
- And third, we have entered into a new phase of the crisis – a political phase- when tough political decisions will need to be made, because the window for substantial policy action is closing. Time is of the essence. (more…)
Filed under: Advanced Economies, Emerging Markets, Europe, Financial Crisis, Financial regulation, IMF | Tagged: Brazil, capital flows, debt, emerging economies, Europe, financial policies, financial risks, Global Financial Stability Report, inflation, intereste rates, Japan, Latin America, macropurdential, policymakers, sovereign risk, stress tests, United States | 5 Comments »
Posted on June 17, 2011 by iMFdirect
By Olivier Blanchard
عربي, 中文, Español, Français, Português, Русский)
Today we’re in Sao Paulo, Brazil, to release our update to the IMF’s World Economic Outlook.
Despite a mild slowdown, the global economic recovery continues but the road to health will be a long one. Downside risks, both old and new, are increasing.
Our world forecast is 4.3% growth for 2011, and 4.5% for 2012, so down by 0.1% for 2011, and unchanged for 2012, relative to April. This figure hides very different performances for advanced economies on the one hand, and for emerging and developing economies on the other. (more…)
Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Employment, Europe, growth, IMF | Tagged: advanced economies, Asia, assets, banks, Brazil, capital flows, commodities, credit, crisis, debt, economy, emerging economies, Europe, financial system, fiscal, food prices, global recovery, government debt and deficits, growth, IMF, iMFdirect, income, inflation, International Monetary Fund, Japan, Latin America, monetary policy, oil prices, unemployment, United States, World Economic Outlook | 4 Comments »
Posted on June 3, 2011 by iMFdirect
By Olivier Blanchard
(Version in Español)
Last week I travelled to Rio de Janeiro in Brazil to participate in a conference on managing capital flows. Organized jointly by the Brazilian authorities and the IMF, the conference brought together experts from both the demand and supply sides of the issue, including many with a wealth of hands-on experience.
The discussion was rich and informative. Clearly we still have a lot to learn about the optimal approach to managing capital flows, about the right policy tools, and the right combination of tools.
To start with two general, but important observations. (more…)
Filed under: Emerging Markets, growth, IMF, Latin America | Tagged: capital account, capital controls, capital flows, Chile, China, emerging markets, foreign exchange, global crisis, Macroeconomic policies, research | 6 Comments »
Posted on June 2, 2011 by iMFdirect
By Anoop Singh
Capital flows into emerging Asia should be high on the ‘watch list’ for policymakers in the region. But, perhaps, not in the way we had previously anticipated.
Twelve months ago our policy antennae were keenly attuned to the risks posed by the foreign capital that flooded into Asia from mid-2009 onwards. What was remarkable about this was the speed of the rebound after the massive drop during the global financial crisis. Within just 5 quarters, net inflows rose from their early 2009 trough to their mid-2010 peak—a mere one-fifth of the time that typically elapsed between troughs and peaks in the cycle of capital flows during the pre-Asian crisis period.
Another twelve months on, what we’re seeing is not really all that “exceptional”—a point often overlooked in the current debate on capital inflows to emerging markets. (more…)
Filed under: Asia, Economic outlook, Emerging Markets, IMF, International Monetary Fund | Tagged: Asian crisis, capital flows, emerging Asia, external buffers, financial risk, financial stability, global financial crisis, Macroeconomic policies, macroprudential policies, monetary policy, monetary transmission, overheating, portfolio flows, Regional Economic Outlook: Asia and Pacific, risky assets | Leave a Comment »
Posted on May 24, 2011 by iMFdirect
By Antoinette M. Sayeh
(Version in Français)
Sub-Saharan Africa’s “frontier markets”—the likes of Ghana, Kenya, Mauritius, and Zambia—were seemingly the destination of choice for an increasing amount of capital flows before the global financial crisis. Improving economic prospects in these countries was a big factor, but frankly, so too was a global economy awash with liquidity.
Then the crisis hit. And capital—particularly in the form of portfolio flows—was quick to flee these countries as was the case for so many other economies.
Fast forward to 2011. Capital flows are coming back to the frontier, but in dribs and drabs. (more…)
Filed under: Africa, Economic outlook, IMF, International Monetary Fund | Tagged: capital controls, capital flows, capital inflows, equity investments, fixed-income investments, foreign direct investment, frontier markets, global financial crisis, liquidity conditions, Macroeconomic policies, macroprudential policies, net private capital flows, portfolio flows, Regional Economic Outlook: Sub-Saharan Africa, shallow financial markets, Sub-Saharan Africa | 1 Comment »
Posted on May 12, 2011 by iMFdirect
By Antonio Borges
(Versions in Español, Français, Português, Русский)
Banks―and the loans they provided in the run-up to the crisis―are at the heart of Europe’s problems today.
Yet it would be wrong to conclude that the crisis was caused by too much financial integration. In fact, the real problem may have been that there was too little financial integration.
Policies to promote deeper integration of Europe’s banks―including through cross-border merger and acquisitions―should be part of the solution. (more…)
Filed under: Economic outlook, Europe, IMF, International Monetary Fund | Tagged: banks, capital flows, cross-border mergers and acquisitions, current account deficits, European Union, external debt, financial integration, financial sector, fixed exchange rates, foreign exchange risk, interest rates, market failures, Regional Economic Outlook: Europe, regulatory and supervisory frameworks, sovereign debt, sustainable growth, the euro | 3 Comments »
Posted on May 4, 2011 by iMFdirect
By Gustavo Adler and Camilo E. Tovar
(Version in Español)
Abundant global liquidity and high exposure to capital movements have put foreign exchange intervention at center stage of the policy debate in Latin America. Although intervention is widely used, there is limited evidence about its effects on the exchange rate, and particularly in terms of slowing the pace of currency appreciation.
In the latest Regional Economic Outlook: Western Hemisphere we took a fresh look at this issue, examining intervention practices and effectiveness for a group of economies in Latin America and other regions during 2004-10. In particular, we sought to answer the following questions:
- How do Latin American countries intervene and in what respects do they differ from other economies?
- What are the rationales for these policies?
- How effective have they been in affecting the exchange rate? (more…)
Filed under: Economic outlook, International Monetary Fund, Latin America | Tagged: capital flows, currency appreciation, derivative markets, exchange rate misalignment, exchange rate regimes, exchange rates, foreign exchange intervention, intervention rules, liquidity conditions, overvalued currency, Regional Economic Outlook: Western Hemisphere, spot markets | 3 Comments »
Posted on April 21, 2011 by iMFdirect
By Leslie Lipschitz and Bas Bakker
For all the talk today about capital flows into emerging economies, the topic has actually been debated for many years within the IMF.
For a decade or more, we have grappled with the idea that very large capital flows into successful emerging market countries were almost inevitable and would prove extremely difficult to manage.
And now, with capital flows becoming larger and more volatile, old policy dilemmas are resurfacing with even greater force.
Filed under: Economic Crisis, Emerging Markets, Europe, Financial Crisis, International Monetary Fund | Tagged: asset price bubbles, capital flows, credit growth, current account deficits, exchange rate, exchange rate flexibility, exchange rate regimes, external vulnerability, fixed exchange rates, foreign currency exposure, foreign exchange risk, interest rates, investment, macroprudential policies, monetary policy, rates of return, risk premiums | 1 Comment »
Posted on March 31, 2011 by iMFdirect
By Dominique Strauss-Kahn
(Version in 中文)
I am delighted to be back in China this week for a high-level seminar in Nanjing on the international monetary system. Every time I come to this part of the world, I am impressed by the dynamism of the economies and the optimism of the people. The future is here.
The region’s economic performance over the past few decades has been nothing short of remarkable. Asia now accounts for about a third of the global economy, up from under just a fifth in 1980. This trend has been reinforced by the crisis, with the emerging market powerhouses leading the global recovery.
Asia has also made tremendous progress with poverty reduction. China alone has pulled hundreds of millions of people out of poverty over the past few decades. Such a feat has never before been accomplished in the history of human civilization.
But to sustain this progress, Asia needs to grapple with numerous challenges today, among them the need to deal with overheating pressures and volatile capital inflows. And this relates directly to our discussion at Nanjing. (more…)
Filed under: Economic Crisis, Global Governance, Globalization, International Monetary Fund, 中文 | Tagged: Asia, capital controls, capital flows, G-20 mutual assessment process, global imbalances, international monetary system, liquidity, poverty reduction, Special Drawing Rights, spillover reports | 6 Comments »