How To Deal With Failed Banks

By Deniz Igan

July 3, 2018

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Reforms since the global financial crisis have made bail-ins a credible option and bail-outs less likely (photo: iStock by Getty Images)

During the global financial crisis, policymakers faced a steep trade-off in handling bank failures. Using public funds to rescue failing banks (bail-outs) could weaken market discipline and lead to excessive risk taking—the moral hazard effect. Continue reading “How To Deal With Failed Banks” »

By | July 3rd, 2018|Advanced Economies, banking, capital markets, correspondent banking|

Economic Preparedness: The Need for Fiscal Space

By Vikram Haksar, Marialuz Moreno-Badia, Catherine Pattillo and Murtaza Syed

June 27, 2018

Versions in عربي中文Baˈhasa indoneˈsia,  日本語Português

Countries must assess the amount of room in their budgets for increasing spending or cutting taxes (photo: Martin Barraud/iStock by Getty Images)

How much leeway national policymakers have for increasing spending or cutting taxes has been hard to assess. Continue reading “Economic Preparedness: The Need for Fiscal Space” »

Chart of the Week: When High Yield Goes Boom

By Divya Kirti

June 26, 2018

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A credit boom can be fueled by excessive optimism among investors (photo: Nick White/Newscom)

We’ve all heard about good cholesterol and bad cholesterol. Too much of the good stuff probably won’t do you any harm. Too much of the bad stuff can lead to a heart attack. Continue reading “Chart of the Week: When High Yield Goes Boom” »

Estimating Cyber Risk for the Financial Sector

By Christine Lagarde

June 22, 2018

Versions in  عربي,  中文,  Español, Français, Baˈhasa indoneˈsia日本語Português, Русский 

Average annual losses to financial institutions from cyber-attacks could reach a few hundred billion dollars a year (photo: Eti Ammos/iStock by Getty Images)

Cyber risk has emerged as a significant threat to the financial system. Continue reading “Estimating Cyber Risk for the Financial Sector” »

Chart of the Week: The Rise of Corporate Giants

By Federico J. Díez and Daniel Leigh

June 6, 2018

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The market power of “superstar” companies in advanced economies is growing (photo: iStock by Getty Images)

The growing economic wealth and power of big companies—from airlines to pharmaceuticals to high-tech companies—has raised concerns about too much concentration and market power in the hands of too few. Continue reading “Chart of the Week: The Rise of Corporate Giants” »

Our Digital Future

By Camilla Lund Andersen

May 30, 2018

“Money makes the world go around,” Liza Minnelli famously sang in the movie Cabaret. Money has for centuries been central to human relationships. Loss of faith in its value can result in economic and political instability, even war. In the past few years, financial technology—fintech for short—has caught the world’s imagination by offering alternatives to traditional means of payment. Will digitalization redefine money? In this issue, we explore the possible consequences, good and bad. Continue reading “Our Digital Future” »

Creating a Better Global Trade System

By Christine Lagarde

May 29, 2018

Versions in عربي, 中文FrançaisBaˈhasa indoneˈsia, 日本語, PortuguêsРусский    

Engineers inspect the 3D printing of a bicycle frame in California: trade in services has risen dramatically and the use of technology is changing how countries trade with each other (photo: Stephen Lam/Reuters /Newscom).

Recent news on global trade has tended to focus on protectionist measures and diplomatic tensions. These challenges have raised concerns over growth and jobs across the world. Continue reading “Creating a Better Global Trade System” »

By | May 29th, 2018|Advanced Economies, capital markets, technology, trade|

Volatility Strikes Back

By Sergei Antoshin, Fabio Cortes, Will Kerry and Thomas Piontek

May 3, 2018 

Investors who bet on continued low volatility suffered steep losses (photo: Richard B. Levine/Newscom).

The bouts of volatility in early February and late March that spooked investors were confined to equity markets. Nevertheless, they illustrate the potential for sudden market moves to expose fragilities in the financial system more broadly.

With central banks in advanced economies set to normalize their monetary policies just as trade and geopolitical tensions flare up, economic and policy uncertainty may rise and financial conditions may tighten abruptly. Continue reading “Volatility Strikes Back” »

Mounting Debt Threatens Sustainable Development Goals

By Chris Lane and Elliott Harris

April 27, 2018

Versions in baˈhasa indoneˈsia(Indonesian), Español (Spanish), Français (French), Português (Portuguese)

A market in Port-au-Prince, Haiti: some developing countries are falling behind when it comes to incomes (photo: Dumont Bildarchiv/Newscom).

In 2015, 193 countries adopted the 17 Sustainable Development Goals (SDGs) as an overarching policy roadmap through 2030. These goals are predicated on the idea that for a sustainable future, economic growth must go hand-in-hand with social inclusion and protection of the environment.

Our respective institutions, the United Nations Department of Economic and Social Affairs (UNDESA) and the International Monetary Fund (IMF), fully support these goals. From the UN perspective, they represent a down payment on a more peaceful, prosperous, and cooperative world, especially in increasingly perilous times. For the IMF, they help underpin economic stability and sustainable and inclusive economic growth. Continue reading “Mounting Debt Threatens Sustainable Development Goals” »

An Even-handed Approach to Crypto-Assets

By Christine Lagarde

April 16, 2018

Versions in  عربي (Arabic), 中文 (Chinese),  Español (Spanish), Français (French), 日本語 (Japanese), Português (Portuguese), Русский (Russian)

Healthcare companies are studying how to use the technology behind crypto assets to maintain confidential medical data (BSIphotos/Newscom).

The dizzying gyrations of crypto-assets such as Bitcoin invite comparisons with the tulip mania that swept Holland in the 17th century and the recent dot-com bubble. With more than 1,600 crypto-assets in circulation, it seems inevitable that many will not survive the process of creative destruction.

In my blog last month, I looked at the dark side of crypto-assets, including their potential use for money laundering and the financing of terrorism. Here, I want to examine the promise they offer. A judicious look at crypto-assets should lead us to neither crypto-condemnation nor crypto-euphoria. Continue reading “An Even-handed Approach to Crypto-Assets” »

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