Ten Years After Lehman—Lessons Learned and Challenges Ahead

By Christine Lagarde

September 5, 2018

عربيBaˈhasa indoneˈsia, Español, 中文, Français日本語, PortuguêsРусский

A trader on the New York Stock Exchange the day US investment bank Lehman Brothers filed for bankruptcy: the global crisis that followed is a defining moment of our time (Photo: Nancy-Kaszerman/ZUMA Press/Newscom)

The global financial crisis remains one of the defining events of our time. It will forever mark the generation that lived through it. Continue reading “Ten Years After Lehman—Lessons Learned and Challenges Ahead” »

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” »

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” »

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” »

Risky Business: Reading Credit Flows for Crisis Signals

By Claudio Raddatz Kiefer and Jérôme Vandenbussche 

April 10, 2018

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

The odds of a severe economic downturn are higher when a growing portion of credit flows to riskier firms, according to a new IMF study (Photo: Pali 137/ iStock by Getty Images).

Supervisors who monitor the health of the financial system know that a rapid buildup of debt during an economic boom can spell trouble down the road. That is why they keep a close eye on the overall volume of credit in the economy. When companies go on a borrowing spree, supervisors and regulators may decide to put the brakes on credit growth.

Trouble is, measuring credit volume overlooks an important question: how much of that additional money flows to riskier companies – which are more likely to default in times of trouble—compared with more creditworthy firms? The IMF’s latest Global Financial Stability Report seeks to fill that gap by constructing measures of the riskiness of credit allocation, which should help policy makers spot clouds on the economic horizon. Continue reading “Risky Business: Reading Credit Flows for Crisis Signals” »

For Home Prices in London, Check the Tokyo Listings

By Claudio Raddatz Kiefer and Jane Dokko

April, 10, 2018

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

Hong Kong viewed from Victoria Peak. House prices across countries and cities are increasingly moving in tandem (Photo: Fraser Hall/Robert Harding/Newscom).

If house prices are rising in Tokyo, are they also going up in London?

Increasingly, the answer is yes.

In recent decades, house prices around the world have shown a growing tendency to move in the same direction at the same time. What accounts for this phenomenon, and what are the implications for the world economy? These are questions that IMF economists explore in Chapter 3 of the latest Global Financial Stability Report. Continue reading “For Home Prices in London, Check the Tokyo Listings” »

Addressing the Dark Side of the Crypto World

By Christine Lagarde

March 13, 2018

Versions in  عربي (Arabic),  中文 (Chinese), Français (French),  baˈhasa indoneˈsia (Indonesian),  日本語 (Japanese), Português (Portuguese), Русский (Russian)

The same reason crypto-assets like Bitcoin are so appealing is also what makes them dangerous (iStock by GettyImages).

Whether Bitcoin’s value goes up or Bitcoin’s value goes down, people around the world are asking the same question: What exactly is the potential of crypto-assets?

The technology behind these assets—including blockchain—is an exciting advancement that could help revolutionize fields beyond finance. It could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries. Continue reading “Addressing the Dark Side of the Crypto World” »

The Euro Area Needs a Fiscal Union

By Helge Berger, Giovanni Dell’Ariccia, and Maurice Obstfeld

February 21, 2018

Version in Français (French) 

Without more tangible elements of a fiscal union, the euro area will remain fundamentally vulnerable to shocks. (photo: iStock by GettyImages) .

The euro area is experiencing a robust recovery, but the architecture supporting Europe’s currency union remains incomplete and leaves the region vulnerable to future financial crises.

While substantial progress has been made to address some architectural issues—conditional lending facilities and key elements of a banking union—we argue in our recent paper that the euro area needs to build elements of a common fiscal policy, including more fiscal risk sharing, to preserve financial and economic integration and stability. Without some degree of fiscal union, the region will continue to face existential risks that policymakers should not ignore. While this is not a new topic, the current favorable economic climate might be the moment to advance the discussion—and the chance to strengthen the euro area. Continue reading “The Euro Area Needs a Fiscal Union” »

Chart of the Week: The Walking Debt: Resolving China’s Zombies

By IMFBlog

December 11, 2017

Version in 中文 (Chinese), 日本語 (Japanese)

IMF research shows that resolving China’s zombie firms can boost productivity and long-term growth prospects (photo: DNY59/iStock by Getty Images).

China’s “zombies” are non-viable firms that are adding to the country’s rising corporate debt problem, and are bad business. Zombie firms are highly indebted and incur persistent losses, but continue to operate with the support of local governments or soft loans by banks—adding very little value to economic prospects. China has already made a lot of progress in resolving these firms, and should continue its efforts to send the zombies packing. Continue reading “Chart of the Week: The Walking Debt: Resolving China’s Zombies” »

Corruption Disruption

By Christine Lagarde

December 8, 2017

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

Corruption can have devastating effects on economic growth and stability (photo: Patric Sandri IKON Images/Newscom)

Why does the IMF care so deeply about corruption? The reason is simple. The job of the IMF is to protect global economic stability and promote strong, sustainable, balanced, and inclusive economic growth. And this becomes difficult, if not impossible, to achieve in the presence of entrenched and institutionalized corruption. Continue reading “Corruption Disruption” »

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