Posted on April 26, 2016 by iMFdirect
By James Daniel, José Garrido, and Marina Moretti
Version in 中文 (Chinese)
China’s high and rising corporate debt problem and how best to address it has received much attention recently. Indeed, corporate debt in China has risen to about 160 percent of GDP, which is very high compared to other, especially developing, countries.
The IMF’s April 2016 Global Financial Stability Report looked at the issue from the viewpoint of commercial banks and resulting vulnerabilities. Its analysis suggests that the share of commercial banks’ loans to corporates that could potentially be at risk has been rising fast and, although currently at a manageable level, needs to be addressed with urgency in order to avoid serious problems down the road. Indeed the success in addressing this issue is important for China’s economic transition and, given its size and growing global integration, the world’s economy at large.
Filed under: China, developing countries, Economic research, Finance, IMF, International Monetary Fund, unemployment | Tagged: bank credit, capital, China, credit, debt restructuring, developing countries, IMF, International Monetary Fund, Labor, nonperforming loans, NPLs, structural reform | Comments Off on Tackling China’s Debt Problem: Can Debt-Equity Conversions Help?
Posted on April 13, 2016 by iMFdirect
By José Viñals
Versions in عربي (Arabic), 中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)
Over the last six months, global financial stability risks increased as a result of the following developments:
- First, macroeconomic risks have risen, reflecting a weaker and more uncertain outlook for growth and inflation, and more subdued sentiment. These risks were highlighted yesterday at the World Economic Outlook press conference.
- Second, falling commodity prices and concerns about China’s economy have put pressure on emerging markets and advanced economy credit markets.
- Finally, confidence in policy traction has slipped, amid concerns about the ability of overburdened monetary policies to offset the impact of higher economic and political risks.
Filed under: Advanced Economies, banking, euro zone, Europe, Finance, Financial markets, IMF, International Monetary Fund, oil, U.S. | Tagged: banking, banks, China, corporate sector, debt, emerging market economies, euro area, Europe, Global Financial Stability Report, monetary policy, non-performing loans, NPLs, structural reforms | Leave a comment »
Posted on April 10, 2016 by iMFdirect
By Jose Viñals, Simon Gray, and Kelly Eckhold
Versions in: عربي (Arabic), Deutsch (German), 日本語 (Japanese), and Español (Spanish)
We support the introduction of negative policy rates by some central banks given the significant risks we see to the outlook for growth and inflation. Such bold policy action is unprecedented, and its effects over time will vary among countries. There have been negative real rates in a number of countries over time; it is negative nominal rates that are new. Our analysis takes a broad view of recent events to examine what is new, country experiences so far, the effectiveness of negative nominal rates as well as their limits and their unintended consequences. Although the experience with negative nominal interest rates is limited, we tentatively conclude that overall, they help deliver additional monetary stimulus and easier financial conditions, which support demand and price stability. Still, there are limits on how far and for how long negative policy rates can go. Continue reading
Filed under: Advanced Economies, banking, euro zone, Europe, Finance, Financial markets, IMF, inflation, International Monetary Fund, Japan | Tagged: bank balance sheets, banks, bonds, corporate bonds, Denmark, equities, European Central Bank, Japan, monetary policy, negative interest rates, nominal interest rates, quantitative easing, real interest rates, Sweden, Switzerland, unconventional monetary policy, zero lower bound | Leave a comment »
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 29, 2016 by iMFdirect
When you drive over potholes on downtown streets, are forced to make large detours to cross rivers lacking bridges, and finally arrive to find no cell coverage, connections between the global infrastructure investment gap and your pension fund might not be the immediate thing that comes to mind. But it should, because:
- Huge pools of available assets: pension funds, insurance companies, mutual funds and sovereign wealth funds sit on $100 trillion in assets. To compare: U.S. nominal GDP in the third quarter of last year was $18 trillion.
- Huge infrastructure investment gap: between $1 to 1.5 trillion per year worldwide.
Filed under: Advanced Economies, Finance, IMF, International Monetary Fund, Investment | Tagged: GDP, IMF, iMFdirect, infrastructure development, insurance, mutual funds, pension funds, private investment, public-private partnerships, sovereign wealth funds | Leave a comment »
Posted on January 20, 2016 by iMFdirect
(Version in عربي, 中文, and Español)
Technology and finance have always gone together. So what’s new this time around? Virtual currencies are part of a broader tech revolution that is driving fundamental change in the global economy.
Filed under: Finance, Financial markets, Financial regulation, International Monetary Fund, technology | Tagged: Bitcoin, currency, Davos, distributed ledgers, finance, financial inclusion, financial stability, global economy, history of money, IMF, monetary policy, technology, United States, virtual currency, virtual currency regulation | 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 »