Emerging-Market Banks’ Government Debt Holdings Pose Financial Stability Risks
Banks’ holdings of sovereign debt rise to a record as governments spend to cushion pandemic impact.
First Global Bank Stress Test Highlights Increased Financial Resilience
The world’s banking systems saw significant capital increases ahead of the pandemic and are resilient to very large shocks.
Europe Needs to Maintain Strong Policy Support to Sustain the Recovery
The pandemic is exacting a heavy toll on Europe. More than 240,000 people have lost their lives. Millions have suffered the illness themselves, the loss of loved ones, or major disruption in their work, their businesses, and their daily lives. […]
A Bridge to Economic Recovery: Be Aware of Financial Stability Risks
The Financial System Is Stronger, but New Vulnerabilities Have Emerged in the Decade Since the Crisis
October 10, 2018
عربي, 中文, Español, Français, Baˈhasa indoneˈsia, 日本語, Português, Русский
Debt owed by governments, companies and households in economies with globally systemically important financial sectors has risen since the global financial crisis (Photo: Richard B. Levine/Newscom)
Although the global expansion has plateaued, easy monetary policies continue to support growth. But we shouldn’t rest too easily. Chapter 1 of the latest Global Financial Stability Report finds that short-term risks to the financial system have increased somewhat over the past six months. […]
Top 5 Blogs on Finance
By IMFBlog
September 11, 2018
A guard stands outside former US investment bank Lehman brothers (photo: Frances M. Roberts/Newscom)
The tenth anniversary of the collapse of US investment bank Lehman Brothers and the global crisis that followed is a sober reminder of what has changed, and what has not, in the world of economics and finance. […]
How Policy Makers Can Better Predict a Downturn – and Prepare
By Claudio Raddatz and Jay Surti
October 3, 2017
Versions in عربي (Arabic) 文, (Chinese), Español (Spanish), Français (French),日本語 (Japanese), Русский (Russian)
A trading floor in Singapore. Financial conditions provide valuable clues to the economic outlook and can improve the accuracy of forecasts (photo: Caro/Oberhaeuser/Newscom).
The global financial crisis showed that periods of robust growth and seeming calm in financial markets can be followed by a sudden surge in market volatility and an unexpected economic downdraft. That’s why it is so important for policy makers to keep a close watch on so-called financial conditions. These can include everything from bond yields and oil prices to foreign exchange rates and levels of domestic debt. […]
Back-to-School Blogs
By IMFBlog
September 5, 2017
Back to school in Paris, France: get caught up on our top blogs you may have missed over the summer (photo: LAURENT CHAMUSSY/SIPA/Newscom)
What a summer it’s been. To help you get a handle on all that has happened in the global economy, our editors have compiled a handy primer of our blogs published over the summer months. […]
Why Talk of Bank Capital ‘Floors’ Is Raising the Roof
By Tobias Adrian and Aditya Narain
June 8, 2017
The headquarters of the Bank for International Settlements in Basel, Switzerland, which houses the Basel Committee on Banking Supervision (photo: Christian Hartmann/Reuters/Newscom)
Calculating how much capital banks should have is often a bone of contention between regulators and banks. While there has been considerable progress on reaching consensus on an international standard, one key issue remains unresolved. This is a proposal to establish a “floor,” or minimum, for the level of capital the largest banks must maintain.
Some financial institutions and national authorities question the need for a “floor,’’ arguing either that differences in business models or other elements of the global regulatory framework—notably limits on the amount of leverage banks may take on—make them redundant. We disagree. The floor reduces the chances that banks can game the system to reduce their capital buffers to levels that aren’t aligned with their risks. It is an essential element of global efforts to create a level playing field for banks operating across countries by strengthening common […]
A New Look at the Benefits and Costs of Bank Capital
By Jihad Dagher, Giovanni Dell’Ariccia, Luc Laeven, Lev Ratnovski, and Hui Tong
The appropriate level of bank capital and, more generally, a bank’s capacity to absorb losses, has been a contentious subject of discussion since the financial crisis. Larger buffers give bankers “skin in the game” helping to prevent excessive risk taking and absorb losses during crises. But, some argue, they might increase the cost of financial intermediation and slow economic growth.