May 3, 2018
The bouts of volatility in early February and late March that spooked investors were confined to equity markets. Nevertheless, they illustrate the potential for sudden market moves to expose fragilities in the financial system more broadly.
With central banks in advanced economies set to normalize their monetary policies just as trade and geopolitical tensions flare up, economic and policy uncertainty may rise and financial conditions may tighten abruptly. […]
October 3, 2017
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. […]