Chart of the Week: Brexit and The City

By IMFBlog

May 29, 2017

It seems likely that Brexit will alter the relationship that UK-based financial firms have with the European Union—even though negotiations are just beginning.

For an idea of how much is at stake for the United Kingdom’s financial services industry, take a look at our Chart of the Week, drawn from the IMF’s latest Global Financial Stability Report. The chart illustrates the linkages that might be affected by the country’s withdrawal from the EU. One example: of the over-the-counter trading in foreign exchange derivatives in the United Kingdom, Germany and France, the UK share comes to 89 percent. Continue reading “Chart of the Week: Brexit and The City” »

Democratizing the Money Market

By IMFBlog

May 26, 2017

Just as technology is changing the way we live and work, it also affects the way we use and move our money. In this podcast, lawyer and bitcoin expert Patrick Murck of Harvard University tells us that financial technology, or fintech, is poised to revolutionize the way the world does business.

Continue reading “Democratizing the Money Market” »

Fintech—A Brave New World for the Financial Sector?

Lagarde.2015MDPORTRAIT4_114x128By Christine Lagarde

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

From smartphones to cloud computing, technology is rapidly changing virtually every facet of society, including communications, business and government. The financial world is no exception.

As a result, the financial world stands at a critical juncture. Yes, the widespread adoption of new technologies, such as blockchain-based systems, offers many potential benefits. But it also gives rise to new risks, including risks to financial stability. That causes challenges for financial regulators, a subject I addressed at the 2017 World Government Summit in Dubai.

Continue reading “Fintech—A Brave New World for the Financial Sector?” »

Small States Confront Big Challenges with Natural Disasters and Climate Change

taozhangBy Tao Zhang

Versions in 中文 (Chinese), and Français (French)

Small states are far more vulnerable than other countries to natural disasters and climate change. On average, the annual cost of disasters for small states (economies with a population of less than 1.5 million) is more than four times that for larger countries, in relation to GDP. These countries—whether landlocked nations or small island states—need a range of approaches to deal with catastrophe, including not only better disaster response but also more focus on risk reduction and preparedness. Continue reading “Small States Confront Big Challenges with Natural Disasters and Climate Change” »

Fixing the Great Distortion: How to Undo the Tax Bias Toward Debt Finance

By Ruud de Mooij, Michael Keen, and Alexander Tieman

“The Great Distortion.” That’s what The Economist, in its cover story of May 2015¸ called the systematic tax advantage of debt over equity that is found in almost every tax system.

This “debt bias” is now widely recognized as a real risk to economic stability. A new IMF study argues that it needs to feature more prominently on tax reform agendas; it also sets out options for how to do that.

Continue reading “Fixing the Great Distortion: How to Undo the Tax Bias Toward Debt Finance” »

Sub-Saharan Africa Growth Lowest in 20 Years

by iMFdirect

The IMF's latest regional economic outlook for Sub-Saharan Africa shows growth at its lowest level in more than 20 years. In this podcast, the African Department’s new Director, Abebe Aemro Selassie, says it’s a mixed story of struggling oil-exporters and strong performers.

Continue reading “Sub-Saharan Africa Growth Lowest in 20 Years” »

A Tale of Two Tellers

Jeff Hayden

by Jeff Hayden

My mother eases her car into the drive-through lane at our local bank, signs the back of her check, and places it in a metal canister. WHOOSH—the cylinder flies through a pneumatic tube to the teller inside the building.

In a few minutes, the teller squawks her thanks from the intercom speaker nearby. Another WHOOSH, and the canister returns. Inside we find a deposit receipt and a lollipop. Welcome to high-efficiency consumer banking, circa 1973.

Summer 2016. In our kitchen, I watch my oldest son rip open his paycheck and whip out his iPhone. TAP. SWIPE. CLICK. The deposit is made in an instant, thanks to an app that plugs him into an electronic banking network.

Continue reading “A Tale of Two Tellers” »

Currency & Power

by iMFdirect

We have a global economy, but we don't have a global currency. Or do we?

In this podcast interview with Benjamin Cohen, professor of International Political Economy at the University of California, Cohen explains why currencies become internationalized, and examines the relationship between world currencies and State power. Continue reading “Currency & Power” »

Sluggish Business Investment in the Euro Area: The Roles of Small and Medium Enterprises and Debt

By John C. Bluedorn and Christian Ebeke

Small businesses could be the lifeblood of Europe’s economy, but their size and high debt are two of the factors holding back the investment recovery in the euro area. The solution partly lies in policies to help firms grow and reduce debt.

Our new study, part of the IMF’s annual economic health check of the euro area, takes a novel bottom-up look at the problem. We analyze the drivers of investment using a large dataset of over six million observations in eight euro area countries, from 2003 to 2013: Austria, Belgium, Germany, France, Finland, Italy, Portugal, and Spain. Continue reading “Sluggish Business Investment in the Euro Area: The Roles of Small and Medium Enterprises and Debt” »

Tackling China’s Debt Problem: Can Debt-Equity Conversions Help?

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.

Continue reading “Tackling China’s Debt Problem: Can Debt-Equity Conversions Help?” »

By | April 26th, 2016|Economic research, Finance, IMF, International Monetary Fund, unemployment|
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