Posted on March 3, 2016 by iMFdirect
By Jihad Dagher, Giovanni Dell’Ariccia, Luc Laeven, Lev Ratnovski, and Hui Tong
The appropriate level of bank capital and, more generally, a bank’s capacity to absorb losses, has been a contentious subject of discussion since the financial crisis. Larger buffers give bankers “skin in the game” helping to prevent excessive risk taking and absorb losses during crises. But, some argue, they might increase the cost of financial intermediation and slow economic growth.
Filed under: banking, Europe, Finance, Financial Crisis, International Monetary Fund, U.S. | Tagged: advanced economies, bank capital, bank credit, bank recapitalization, banking, capital buffers, capital flows, Europe, IMF, International Monetary Fund, nonperforming loans, United States | Leave a comment »
Posted on February 11, 2016 by iMFdirect
By Poul M. Thomsen
Versions in عربي (Arabic), Español, Français, and ελληνικά (Greek)
Having successfully pulled Greece from the brink last summer and subsequently stabilized the economy, the government of Alexis Tsipras is now discussing with its European partners and the IMF a comprehensive multi-year program that can secure a lasting recovery and make debt sustainable. While discussions continue, there have been some misperceptions about the International Monetary Fund’s views and role in the process. I thought it would be useful to clarify issues.
Filed under: Debt Relief, euro zone, Europe, Government, Greece, IMF, International Monetary Fund | Tagged: debt, debt relief, debt sustainability, euro zone, Europe, financial stability, GDP, Germany, government, Greece, Grexit, IMF, iMFdirect, International Monetary Fund, pension reform, productivity | Leave a comment »
Posted on January 11, 2016 by iMFdirect
by Vitor Gaspar, Michael Keen, and Ian Parry
(Versions in عربي, 中文, Español, and Français)
The Paris Agreement on Climate Change is a historic diplomatic achievement. Climate change is a global problem. Many believed that global problem solving would prove elusive: the benefits of cutting emissions arise globally while the costs of doing so are borne nationally, so national self-interest would prevent a meaningful agreement. Paris proves otherwise—creating a commonality of purpose at the global level. Continue reading
Filed under: Advanced Economies, climate change, Europe, Fiscal, Fiscal policy, IMF, International Monetary Fund | Tagged: carbon pricing, Climate change, COP-21, energy prices, energy subsidies, global energy subsidies, new technology, oil, Paris agreement | Leave a comment »
Posted on December 17, 2015 by iMFdirect
By Fabio Cortes
Current regulations only require U.S. and European bond mutual funds to disclose a limited amount of information about the risks they have taken using financial instruments called derivatives. This leaves investors and policymakers in the dark on a key issue for financial stability. Our new research in the October 2015 Global Financial Stability Report looks at just how much is at stake. Continue reading
Filed under: Economic research, Europe, Financial markets, International Monetary Fund, U.S. | Tagged: bonds, derivatives, financial markets, financial stability, Global Financial Stability Report, IMF, interest rates, leverage, market volatility, mutual funds, United States | Leave a comment »
Posted on December 10, 2015 by iMFdirect
World leaders are meeting in Paris to forge a new climate deal. We interviewed two leading thinkers on climate, Nick Stern and Christiana Figueres.
Filed under: Advanced Economies, Africa, climate change, Emerging Markets, Europe, Finance, Fiscal policy, Globalization, Government, growth, IMF, Inequality, International Monetary Fund, Latin America, Low-income countries, Reform | Tagged: Christiana Figueres, Nick Stern | Leave a comment »
Posted on November 23, 2015 by iMFdirect
by Jean Portier and Luca Sanfilippo
A stock in excess of €900 billion of nonperforming loans continue to clutter the European banking system, impeding economic growth. This issue remains a key challenge for policy makers. As we show in our latest Global Financial Stability Report, part of the solution to address this legacy is an upgrade in legal systems. Current inefficiencies—long foreclosure times and insolvency procedures—are a reason for the gap between the value of loans on bank balance sheets and the price investors are willing to pay. A reliable legal environment and an efficient judicial system maximize the value of nonperforming loans (NPLs), reduce the value gap and give banks greater incentive to get NPLs off the books. Our analysis, using time to foreclose as a proxy for effective insolvency regimes, shows there is a large upside for new lending capacity in the euro area (Chart 1).
Filed under: Advanced Economies, Europe, IMF, International Monetary Fund | Tagged: balance sheet, banks, credit, euro area, growth, insolvency, Italy, non-performing loans, NPLs | 1 Comment »