Global Financial Stability: What’s Still To Be Done?

The quest for lasting financial stability is still fraught with risks. The latest Global Financial Stability Report has two key messages: policy actions have brought gains to global financial stability since our September report; but current policy efforts are not enough to achieve lasting stability, both in Europe and some other advanced economies, in particular the United States and Japan.

Disappearing Deficits

In our work at the IMF, we sometimes discover that governments choose to employ accounting devices—or stratagems that make the deficit smaller without actually causing any pain, and without actually improving public finances. In ideal accounting, this would not be possible. In real accounting, it sometimes is.

The Logic and Fairness of Greece’s Program

The program deals squarely with the two most fundamental issues facing Greece―not only high debt but also low competitiveness. And it is fair, both in asking for shared sacrifices, not only within Greece, but also between Greece and its creditors.

Avoiding a Lost Generation

Young people were innocent bystanders in the global financial crisis, but they may well end up paying the heaviest price for the policy mistakes that have led us to where we are today. Young people will have to pay the taxes to service the debts accumulated in recent years.

2011 In Review: Four Hard Truths

As 2011 draws to a close, the recovery in many advanced economies is at a standstill, with some investors even exploring the implications of a potential breakup of the euro zone, and the real possibility that conditions may be worse than we saw in 2008. Olivier Blanchard, the IMF’s Chief Economist, draws four main lessons in his year in review.

Christine Lagarde on Sovereign Debt, Growth and Social Instability

The IMF chief gave a speech in New York City today that sets out how the IMF can help countries tackle this troika of challenges to the global economy.

Between a Rock and a Hard Place: U.S. Fiscal Policy

The United States faces two pressing challenges to fiscal policy: raise the debt ceiling, and begin the arduous process of reducing deficits and debt.
And, right now, this leaves U.S. fiscal policy between a rock and a hard place. How much savings should be found and in what form are crucial questions. So is when to put those savings in effect.

Euro Muscles in Brussels: Christine Lagarde on Greece

The head of the IMF Christine Lagarde was clear during her press conference—European leaders deal to help Greece and the euro area is a very constructive and comprehensive package of measures to resolve debt problems.

Postcard from São Paulo: the Latest Global Fiscal News–and Some of It’s Actually Good

In São Paulo, Brazil last Friday we launched our latest assessment of the state of government finances, debts and deficits. While many countries are slogging through a tough fiscal time, there is some good news, including in the United States ̶ the deficit will be lower this year than previously expected. I will also give you an assessment of how the new information affects our sense of what needs to be done in the future.

Tough Political Decisions Needed to Fix the Financial System

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.

I have three key messages:

Financial risks have increased since April

Policymakers in both advanced and emerging economies need to step up their efforts to preserve financial stability and safeguard the recovery.

We have entered into a new phase of the crisis – a political phase- when tough political decisions will need to be made. Time is of the essence.

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