Posted on September 21, 2011 by iMFdirect
By José Viñals
(Versions in عربي, Français, 日本語, and Русский)
We are back in the danger zone. Since the IMF’s previous Global Financial Stability Report, financial stability risks have increased substantially—reversing some of the progress that had been made over the previous three years.
Several shocks have recently buffeted the global financial system: unequivocal signs of a broader global economic slowdown; fresh market turbulence in the euro area; and the credit downgrade of the United States.
This has thrown us into a crisis of confidence driven by three main factors: weak growth, weak balance sheets, and weak politics. Continue reading
Filed under: Economic research, Europe, Financial Crisis, Financial regulation, Financial sector supervision, IMF, International Monetary Fund | Tagged: balance sheet repair, bank balance sheets, capital buffers, confidence, credit risk, deleveraging, financial danger zone, financial stability risk, Global Financial Stability Report, global financial system, household balance sheets, IMF, iMFdirect, International Monetary Fund, sovereign and financial balance sheets, sovereign risks, weak balance sheets | 9 Comments »
Posted on March 22, 2011 by iMFdirect
Guest post by Joseph E. Stiglitz, Columbia University, and
co-host of the Conference on Macro and Growth Policies in the Wake of the Crisis
The most remarkable aspect of the recent conference at the IMF was the broad consensus that the macroeconomic models that had been relied upon in the past and had informed major aspects of monetary and macro-policy had failed. They failed to predict the crisis; standard models even said bubbles couldn’t exist—markets were efficient. Even after the bubble broke, they said the effects would be contained. Even after it was clear that the effects were not “contained,” they provided limited guidance on how the economy should respond. Maintaining low and stable inflation did not ensure real economic stability. The crisis was “man-made.” While in standard models, shocks were exogenous, here, they were endogenous. Continue reading
Filed under: Economic Crisis, Economic research, Financial Crisis, International Monetary Fund | Tagged: capital flows, central banks, credit risk, cross-border linkages, economic recovery, financial markets, financial sector regulation, financial stability, fiscal policy, industrial policy, inflation, Joseph Stiglitz, Macro and Growth Policies in the Wake of the Crisis, macroeconomic models, macroeconomic policy, macroeconomic stability | 15 Comments »
Posted on December 7, 2010 by iMFdirect
By Masood Ahmed
(Version in عربي )
Bank credit has been very slow to pickup in the six nations of the Gulf Cooperation Council (GCC). How big a problem is this for their economic recovery?
Sluggish credit growth in the post-crisis period was hardly a unique development, as indicated in our latest Regional Economic Outlook. More than a dozen countries in the Middle East and Central Asia region, and countless more outside the region, shared this experience. But while there are clearer signs of recovery in some countries, credit to the private sector is still barely growing in the GCC, notwithstanding policy efforts to revive it.
It might seem easy to ring the alarm bells. After all, won’t the prospect of weak credit growth restrain economic activity in the short-term? Perhaps. But we believe the negative impact of credit growth may not be quite so severe.
Why not? In part, that answer lies in how we arrived at the current situation. Continue reading
Filed under: Economic Crisis, Economic outlook, Middle East, عربي | Tagged: Bahrain, bank credit, capital adequacy, credit growth, credit risk, credit to the private sector, global crisis, Gulf Cooperation Council, Kuwait, Oman, Qatar, Regional Economic Outlook: Middle East and Central Asia, Saudi Arabia, U.A.E | 1 Comment »