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” »

The Buzz of Populism and Its Pull on the Economy

By IMFBlog

February 9, 2018

(photo: Berkeley Review)

If you believe the economy can explain the rise of populism, political scientist Cristóbal Rovira Kaltwasser says it’s a bit more complicated than that.

“If you think about populist radical right parties in Western Europe, the party that gets the most votes is in Switzerland. And the economy in Switzerland is running perfectly!”

Populism has become a bit of a buzz word of late, and it was the subject of a seminar at the 2018 American Economic Association’s Annual Meeting. The IMF’s Antonio Spilimbergo organized the panel, which included Kaltwasser and economic stalwarts Dani Rodrik and Raghuram Rajan. Continue reading “The Buzz of Populism and Its Pull on the Economy” »

Top Ten Blogs of 2017

By IMFBlog

December 28, 2017

Read the top ten blogs of 2017 (photo: Times Square- New York-Pacific Press/SipaUSA/Newscom)

We have all had quite the year. Our readers' interests in 2017 focused on topics that affect how people live their lives: why wages are low, rising income and wealth inequality, household debt, climate change, and the scourge of corruption, to name a few.

As we wrap up the highs and lows of 2017 and get ready for whatever 2018 has in store, here is the list of the top ten blogs of the year based on readership. From all the elves editors at IMFBlog, we wish you a year of peace and interesting reads.

Continue reading “Top Ten Blogs of 2017” »

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” »

Cyber Defense Must Be Global

By Emanuel Kopp, Lincoln Kaffenberger, and Christopher Wilson

October 26, 2017

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

Cyber risk has no geographical borders, and the threat is global, so the role of international institutions is crucial (solarseven/iStock by Getty Images).

Cyberattacks on financial institutions are becoming more common and considerably more sophisticated. High-profile cases like the Equifax breach, which compromised the confidentiality of 143 million Americans’ credit information, and the theft of US$81 million from Bangladesh Bank, are just two examples of recent cyber breaches in the financial industry.

Today, cyber risk is a permanent threat to financial institutions and the proper functioning of the highly interconnected financial system. Banks of all sizes experience cyberattacks every day. Breaches of individual firms can cause adverse knock-on effects for other financial and nonfinancial firms and give rise to systemic risk, a new dimension of cyber risk that is little understood. Continue reading “Cyber Defense Must Be Global” »

Time to Act Now: It’s All About the Right Policy Mix

By IMFBlog

October 19, 2017

"The road ahead is not an easy one,’’ the IMF’s Executive Directors wrote after the IMF’s first ever Annual meeting in 1946.’’ We do not underestimate the difficulties facing us.’’

More than 70 years later, we’ve encountered many a storm across continents from the Latin American sovereign debt crisis to the Savings and Loans crisis to the Asian crisis. And then there was the global financial crisis of 2008. Continue reading “Time to Act Now: It’s All About the Right Policy Mix” »

Corruption in Latin America: A Way Forward

By David Lipton, Alejandro Werner, and S. Pelin Berkmen

September 28, 2017

Versions in Español (Spanish),  Português (Portuguese)

Sustained action on many fronts will be needed to push countries out of the corruption trap (photo: People Images/iStock). 

In our first blog of this two-part series, we noted that, despite recent progress, corruption in Latin America is still high. In this second blog, we look at measures to fight corruption that have worked well in other countries. Learning about these policies can provide insights to guide Latin America in the design of their anti-corruption strategies, even if the final shape of these policies will differ depending on country specifics. Continue reading “Corruption in Latin America: A Way Forward” »

Corruption in Latin America: Taking Stock

By  David LiptonAlejandro Werner, Carlos Gonçalves

September 21, 2017 

Versions in Español (Spanish)  Português (Portuguese)

Systemic corruption drains public resources and drags down economic growth (photo: People Images/iStock).

Corruption continues to make headlines in Latin America. From a scheme to shelter assets leaked by documents in Panama, to the Petrobras and Odebrecht scandals that have spread beyond Brazil, to eight former Mexican state governors facing charges or being convicted, the region has seen its share of economic and political fallout from corruption. Latin Americans are showing increasing signs of discontent and demanding that their governments tackle corruption more aggressively.

Continue reading “Corruption in Latin America: Taking Stock” »

Stepping up the Fight Against Money Laundering and Terrorist Financing

By Christine Lagarde

July 26, 2017

Versions in ربي (Arabic),  中文 (Chinese), Français (French), Русский (Russian), and Español (Spanish)

Money laundering and terrorist financing threaten economic stability. International cooperation is vital in the fight against misuse of the financial system (photo: CraigRJD/iStock by Getty Images)

Corrupt officials, tax cheats, and the financial backers of terrorism have one thing in common: they often exploit vulnerabilities in financial systems to facilitate their crimes.

Money laundering and terrorist financing can threaten a country’s economic and financial stability while funding violent and illegal acts. That is why many governments have stepped up the fight against such practices, helped by international institutions such as the IMF.

Continue reading “Stepping up the Fight Against Money Laundering and Terrorist Financing” »

Corrosive and Costly Corruption

By IMFblog

July 14, 2017 

Corruption can hurt growth and ruin people’s economic chances (photo: Eugene Keebler/iStock)

Corruption can lead to pervasive distrust in government, generating violence, civil strife, and conflict. And the results are devastating for people.

Another problem is that corruption is costly—particularly for those who are already worse off. IMF research shows that in countries with greater levels of corruption, infant mortality and dropout rates are especially high, partly due to less spending on health and education. Reduced investment in these areas tends to hurt poor people the most, and contributes to higher inequality. Continue reading “Corrosive and Costly Corruption” »

Load More Posts