Posted on February 29, 2012 by iMFdirect
By Jonathan D. Ostry
(Version in Español)
The global financial crisis has reminded emerging market economies, if they needed reminding, that capital flows can be highly volatile and that crises need not be home grown.
Emerging markets have been affected in a variety of ways, not least by the sharp ups and downs in exchange rates that volatile capital flows engender.
These ups and downs may be less benign in emerging markets than they might be in advanced economies for a number of reasons.
- First, emerging markets may have more fragile balance sheets—essentially they are less well hedged against currency risk—so depreciations may engender financial distress and even bankruptcies and adverse effects on economic activity.
- Second, they may be less flexible, so that when the exchange rate strengthens and the traded goods sector loses competitiveness, this may have permanent effects on the economy even if the exchange rate later reverts to its initial level.
Filed under: Economic Crisis, Economic research, Emerging Markets, Finance, Financial Crisis, Financial regulation, Financial sector supervision, Globalization, IMF, International Monetary Fund, Public debt, recession | Tagged: Atish Ghosh, foreign exchange intervention, FX, iMFdirect blog, inflation targeting, Jonathan Ostry, macroprudential regulations, Marcos Chamon | 3 Comments »
Posted on October 21, 2010 by iMFdirect
By Anoop Singh
I am in Asia this week to launch our October 2010 Regional Economic Outlook: Asia and Pacific (REO) in Jakarta and Singapore. As I have inevitably found during visits to Asia over so many years, the mood here is confident about future economic prospects. Yet it is also watchful for risks that may be lurking over the horizon. This mood matches closely the main messages of our current assessment of the outlook for the region. (more…)
Filed under: Asia, Economic outlook, IMF, International Monetary Fund | Tagged: capital inflows, currency appreciation, economic recovery, external risks, financial markets, fiscal consolidation, inflationary pressures, macroprudential regulations, monetary tightening, policy stimulus, private domestic demand, Regional Economic Outlook: Asia and Pacific | Leave a Comment »
Posted on October 3, 2010 by iMFdirect
By José Viñals
Fearful financial markets, an uncertain growth outlook, fiscal anxieties, long unemployment lines….no other financial crisis since the Great Depression has led to such widespread dislocation in financial markets, with such abrupt consequences for growth, trade, and employment.
The crisis exposed fundamental weaknesses in many areas of the world economy, the most obvious being dramatic deficiencies in the regulation and supervision―nationally and internationally―of financial institutions and markets.
On the bright side, the crisis has provided the impetus for a major overhaul of the financial regulatory system. So, are we making the most of this opportunity to fix the system? (more…)
Filed under: Economic Crisis, Financial Crisis, Financial regulation, Financial sector supervision, IMF, International Monetary Fund | Tagged: Basel Committee on Banking Supervision, cross-border exposures, financial crisis, financial institutions, financial markets, Financial regulation, financial regulatory system, financial stability contribution, financial supervision, macroprudential regulations, Microprudential regulations, resolution mechanisms | 2 Comments »