By José Viñals
Global financial stability is improving—we have begun to turn the corner.
But it is too early to declare victory as there is a need to move beyond liquidity dependence—the central theme of our report—to overcome the remaining challenges to global stability.
We have made substantial strides over the past few years, and this is now paying dividends. As Olivier Blanchard discussed at yesterday’s press conference of the World Economic Outlook, the U.S. economy is gaining strength, setting the stage for the normalization of monetary policy.
In Europe, better policies have led to substantial improvements in market confidence in both sovereigns and banks.
In Japan, Abenomics has made a good start as deflationary pressures are abating and confidence for the future is rising. And emerging market economies, having gone through several recent bouts of turmoil, are adjusting policies in the right direction.
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