August 30, 2017
European banking has made considerable progress in the past few years: Banks have built up capital, regulation is stronger and supervision has been enhanced. But profitability remains weak, posing risks for financial stability.
In a sample of more than 170 large European lenders with combined assets of $35 trillion, roughly half generated a weak return on equity in 2016, and banks representing only 15 percent of assets generated a healthy return on equity, defined as more than 10 percent. Weak profitability is also shown in a low return on assets for domestic banks in many European countries. The drivers of these weak returns reflect varying combinations of low income, high costs, or provisions needed to build buffers against non-performing assets.
August 24, 2017
Young adults in advanced economies must take steps to increase their retirement income security
Public pensions have played a crucial role in ensuring retirement income security over the past few decades. But for the millennial generation coming of working age now, the prospect is that public pensions won’t provide as large a safety net as they did to earlier generations. As a result, millennials should take steps to supplement their retirement income.
August 10, 2017
Japan’s population is shrinking and getting older, posing challenges to the nation’s financial system. How Japan copes could guide other advanced economies in Asia and Europe that are grappling with the same trends but are at an earlier phase of similar demographic developments.
August 4, 2017
August 1, 2017
Six countries in central Africa have been hit hard by the collapse in commodity prices. Oil prices dropped, economic growth stalled, public debt rose, and foreign exchange reserves declined. A delayed response from policymakers, and a regional conflict have worsened the situation further for people in the region.
The countries of the Central African Economic and Monetary Community are Gabon, Cameroon, Chad, the Central African Republic, the Republic of Congo, and Equatorial Guinea. They share a common currency—the CFA franc—that is pegged to the euro, and have a common central bank that holds the region’s pool of foreign exchange reserves. Continue reading “A Common Cause for Sustainable Growth and Stability in Central Africa” »
July 26, 2017
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.
July 24, 2017
The recovery in global growth that we projected in April is on a firmer footing; there is now no question mark over the world economy’s gain in momentum.
As in our April forecast, the World Economic Outlook Update projects 3.5 percent growth in global output for this year and 3.6 percent for next.
The distribution of this growth around the world has changed, however: compared with last April’s projection, some economies are up but others are down, offsetting those improvements. Continue reading “A Firming Recovery” »
July 13, 2017
Asia today is the fastest-growing region in the world, and the largest contributor to global growth. It has six members of the Group of Twenty advanced and emerging economies, and its economic and social achievements are well recognized.
But 20 years ago, July 1997 marked the beginning of the Asian Financial Crisis, when a combination of economic, financial and corporate problems triggered a sharp loss of confidence and capital outflows from the region’s emerging market economies. The crisis began in Thailand on July 2, when the baht’s peg to the dollar was dropped, and eventually spread to Korea, Indonesia and other countries. Continue reading “What We Have Seen and Learned 20 Years After the Asian Financial Crisis” »
June 12, 2017
Some of the world’s top policymakers and investors are gathering in Berlin to discuss a new initiative that could help reshape Africa’s economic future.
Millions of citizens could see tangible economic benefits from the recently launched Group of Twenty advanced and emerging economies' initiative, known as the “Compact with Africa.” The goal is to boost private investment by harnessing the expertise and resources of governments, investors, and international organizations.
The Compact is about facilitating projects that can lift productivity and living standards. It is about creating fresh opportunities on a continent where 70 percent of the population is under 35 years of age.