Risks to Financial Stability Increase, Bold Action Needed

Posted on July 17, 2012 by iMFdirect

By José Viñals

(Versions in  عربي, 中文, Español, Français, Русский, 日本語)

Our latest update of the Global Financial Stability Report has three key messages.

First, financial stability risks have increased, because of escalating funding and market pressures and a weak growth outlook.

Second, the measures agreed at the recent European leaders’ summit provide significant steps to address the immediate crisis, but more is needed. Timely implementation and further progress on banking and fiscal unions must be a priority.

And third, time is running out. Now is the moment for strong political leadership, because tough decisions will need to be made to restore confidence and ensure lasting financial stability in both advanced and emerging economies. It is time for action.

Now, why have financial stability risks increased?

(more…)

Filed under: Advanced Economies, Europe, Financial Crisis, IMF, International Monetary Fund | Tagged: , , , , , , , , , , , , , , , , , , , , , , , | 3 Comments »

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

Posted on April 18, 2012 by iMFdirect

By José Viñals

(Versions in Español, عربي)

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.

Much has been done

In recent months, important and unprecedented policy steps have been taken to quell the crisis in the euro area. At the national level, stronger policies are being put in place in Italy and Spain; a new agreement has been reached on Greece; and Ireland and Portugal are making good progress in implementing their respective programs. Importantly, the European Central Bank’s decisive actions have supported bank liquidity and eased funding strains, while banks are reinforcing their capital positions under the guidance of the European Banking Authority. Finally, steps have been taken to enhance economic governance, promote fiscal discipline, and buttress the “firewall” at the euro area level.

(more…)

Filed under: Advanced Economies, Economic Crisis, Emerging Markets, Europe, Finance, Financial Crisis, Financial regulation, Financial sector supervision, G-20, IMF, International Monetary Fund | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 5 Comments »

The Impact of the Gloomier Global Outlook on Latin America

Posted on February 10, 2012 by iMFdirect

By Nicolás Eyzaguirre

(Version in Español)

The IMF has sharply marked down its forecast for world growth and it now expects a mild recession in the euro area. Naturally, weaker world growth will affect economic activity in Latin America and the Caribbean.

Concretely, the Fund expects the world economy to grow by just 3¼ percent in 2012, ¾ percentage points lower than our September forecasts.

In contrast, our forecast for the U.S. economy for 2012 is unchanged, as incoming data signal a stronger—but still sluggish—domestic recovery that will offset a weaker global environment. Commodity prices will be affected by ebbing global demand, with oil projected to fall about 5 percent and non-oil commodities about 14 percent.

(more…)

Filed under: Economic outlook, Economic research, Español, Financial Crisis, International Monetary Fund, Latin America | Tagged: , , , , , , , , , , , , , , , , | 2 Comments »

Latin America: What’s Ahead in 2012?

Posted on January 4, 2012 by iMFdirect

By Nicolás Eyzaguirre

(Version in Español, Português)

A few days after the first sunrise of 2012 kissed the shores of Latin America, it is natural to ask: What does the New Year hold for the region’s economies, especially with Europe still under stress?

For sure, a dimmer economic environment, here and abroad. Growth has softened in the larger countries of the region. Looking North, the United States is growing a bit more, but elsewhere activity is softening, including in China—an increasingly important customer for the region’s commodities.

Perhaps more importantly, global financial markets are still strained, because many questions about advanced economies remain unanswered:    (more…)

Filed under: Economic Crisis, Economic outlook, Emerging Markets, Europe, Finance, Financial Crisis, growth, International Monetary Fund, Latin America | Tagged: , , , , , , , , , , , , , , , | 5 Comments »

Central Banks, Financial Regulators, and the Quest for Financial Stability: 2011 IMF Annual Research Conference

Posted on November 7, 2011 by iMFdirect

By Olivier Blanchard

The global financial crisis gave economists pause for thought about what should be the future of macroeconomic policy. We have devoted much of our thinking to this issue these past three years, including how the many policy instruments work together.

The interactions between monetary and macroprudential policies, in particular, remain hotly debated. And this year’s IMF Annual Research Conference is an important opportunity to take that debate another step forward.

Looking back, it is striking how many papers from last year’s conference—on post-crisis macroeconomic and financial policies—have been so immediately relevant to events on the ground. Just to give you an example: the paper on fiscal space is obviously front and center in the policy debate on the European sovereign crisis, the United States’ budget, and challenges faced by advanced country governments more generally.

This year’s topic—monetary and macroprudential policies—is equally relevant. It goes to the core of central banks’ mandates, and their role in achieving macroeconomic and financial stability. The financial crisis triggered a fundamental rethinking of these issues, but much research, both conceptual and empirical, remains to be done. The conference provides an excellent opportunity to engage with prominent academics, policymakers and private sector practitioners. I hope the conference will contribute to expanding the frontier of knowledge on this topic. (more…)

Filed under: Economic research, Financial regulation, IMF, International Monetary Fund | Tagged: , , , , , , , , , , , , , , , , , , , , | 8 Comments »

Dealing with Uncertain Economic Times: The Outlook for Asia

Posted on October 13, 2011 by iMFdirect

By Anoop Singh

(Versions in 中文, 日本語)

Recent large equity sell-offs across Asia and safe haven flows into Japan illustrate perfectly the region’s vulnerabilities to further global shocks. While the region’s fundamentals—built up over the past decade—remain relatively strong, economic uncertainties in Europe and the United States pose large downside risks.

The world economy has entered a dangerous new phase and, as the IMF’s Managing Director stated recently, “what makes the situation all the more urgent is that it has implications for every country.”

Our Regional Economic Outlook for Asia and the Pacific emphasizes these risks, and stresses the need for policymakers to remain vigilant and nimble in this extraordinarily uncertain climate. The view from here in Tokyo—looking out at the region—may be more serene than the view from other advanced country capitals, but there are storm clouds on the horizon. (more…)

Filed under: Asia, Economic outlook, Emerging Markets, Europe, growth, IMF, Inequality, International Monetary Fund, Low-income countries | Tagged: , , , , , , , , , , , , , , , , , | 1 Comment »

Resolve and Determination—How We Get Out of This Together

Posted on September 27, 2011 by iMFdirect

By Christine Lagarde

(Versions in  عربي,  中文,  日本語 and Español)

This past weekend, 187 countries came together in Washington D.C. to focus on the economic crisis facing the world.

They were here for the 2011 Annual Meeting of the IMF and World Bank, at which finance ministers and central bank governors mix with businesspeople, civil society, labor leaders, and parliamentarians to discuss the critical issues we face.

Coming in to this Meeting, I had warned of a dangerous new phase now facing the global economy and had called for bold and collective action. Coming out of the Meeting, I feel strongly that the global community is beginning to respond.

Why? Three reasons: a shared sense of urgency, a shared diagnosis of the problems, and a shared sense that the steps needed in the period ahead are now coming into focus. (more…)

Filed under: Advanced Economies, Annual Meetings, Economic outlook, Emerging Markets, growth, IMF, International Monetary Fund, Low-income countries, Multilateral Cooperation | Tagged: , , , , , , , , , , , , , , , , , , , , , , | 71 Comments »

Global Growth Hits a Soft Patch

Posted on June 17, 2011 by iMFdirect

By Olivier Blanchard

(Versions in
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: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 4 Comments »

Inflation in the Middle East—Looking at the Right Numbers

Posted on June 6, 2011 by iMFdirect

By Masood Ahmed

Across the world, surging international food prices have become a major cause for concern and topic of debate. This is especially so in the Arab world, which is home to some of the largest food importers and where rising food prices have been one of the factors in recent political unrest.

In the context of ongoing political developments, governments across the region are responding to the rise in commodity prices with hikes in fuel and food subsidies, civil service wage and pension increases, additional cash transfers, tax reductions, and other spending increases. These measures will help poor households maintain their purchasing power and limit further increases in domestic food prices.

How should central banks—whose task is to prevent general price increases that would further cut into peoples’ incomes—react? What inflation metric should they target? (more…)

Filed under: Economic Crisis, IMF, Inequality, Middle East | Tagged: , , , , , , , , , , | 6 Comments »

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