Posted on May 5, 2015 by iMFdirect
By Reinout De Bock, Andrea Maechler, and Nobuyasu Sugimoto
(Versions in Français and deutsch)
Low interest rates in the euro area pose substantial challenges to the life insurance industry. Insurers—particularly in Germany and Sweden—offer their clients long-term policies, sometimes more than 30 years, without holding assets of a correspondingly long duration. Moreover, many policies contain generous return guarantees, which are unsustainable in today’s low interest rate environment.
In 2014, stress tests showed European life insurers are vulnerable to a “Japanese-like” scenario.
Filed under: Advanced Economies, Economic outlook, Economic research, Europe, Finance, Fiscal policy, growth, IMF, International Monetary Fund, Multilateral Cooperation, Reform | Tagged: Europe, European Union, Germany, interest rates, Japan, Life insurance, pension, stress tests, Sweden, United States | Leave a comment »
Posted on June 20, 2011 by iMFdirect
By José Viñals
(Versions in عربي, 中文, Español, Français, Русский)
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.
Let me start with three key messages:
- First, financial risks have increased since April.
- Second, as a result, policymakers in both advanced and emerging economies need to step up their efforts to preserve financial stability and safeguard the recovery.
- And third, we have entered into a new phase of the crisis – a political phase– when tough political decisions will need to be made, because the window for substantial policy action is closing. Time is of the essence. Continue reading
Filed under: Advanced Economies, Emerging Markets, Europe, Financial Crisis, Financial regulation, IMF | Tagged: Brazil, capital flows, debt, emerging economies, Europe, financial policies, financial risks, Global Financial Stability Report, inflation, intereste rates, Japan, Latin America, macropurdential, policymakers, sovereign risk, stress tests, United States | 5 Comments »
Posted on March 9, 2011 by iMFdirect
By Stijn Claessens and Ceyla Pazarbasioglu
(Version in Español)
Crises are like stories; they have a beginning, middle, and an end, and on occasion, we learn something along the way.
In times of crisis, choices must be made. In the most recent global economic crisis policymakers moved quickly to stabilize the system, providing massive financial support, which is the right response in the beginning of any crisis. But that only treated the symptoms of the global financial meltdown, and now a rare opportunity is being thrown away to tackle the underlying causes.
Without restructuring financial institutions’ balance sheets and their operations, as well as their assets ‒ loans to over-indebted households and enterprises ‒ the economic recovery will suffer, and the seeds will be sown for the next crisis. Continue reading
Filed under: Advanced Economies, Economic Crisis, Financial Crisis, Financial regulation, International Monetary Fund | Tagged: bank balance sheets, cross-border exposures, financial institutions, financial restructuring, financial sector, financial sector reform, financial sector regulation, financial system risk, global economic crisis, nonperforming loans, resolution mechanisms, restructure assets, stress tests, systemic risk | 8 Comments »