Financial System | IMF Blog

Aging Japan Puts a Strain on the Financial System

August 10, 2017

Versions in 中文 (Chinese), 日本語 (Japanese)

Elderly shoppers in Tokyo’s Sugamo district: As Japan's population ages, demand for financial services shifts (photo: Issei Kato/Reuters/Newscom).

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.

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By IMFBlog| August 10th, 2017|Advanced Economies, aging, Asia, banking, Economic outlook, Economic research, Employment, Europe, Finance, Financial markets, Government, Investment, Japan, monetary policy|

What Happens When Banks Stop Doing Business With Some Countries

By iMFdirect

When global banks decide to withdraw from some countries and no longer do business with banks there, the global effect so far has been a gentle ripple, but if unaddressed, it may become more like a tsunami for the countries they leave.

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By IMFBlog| June 30th, 2016|banking, Financial regulation, IMF, International Monetary Fund, Investment, Uncategorized|

U.S. Economy Returning to Growth, but With Pockets of Vulnerability

By Christine Lagarde

IMF staff have just concluded their annual health check of the U.S. economy, and released their concluding statement.

This year we have also undertaken a Financial Sector Assessment Program with the United States. We conduct these once every 5 years for systemically important countries and it is a comprehensive exercise looking at the whole U.S. financial system.

Given this important work, we have focused our review of the U.S. economy on financial stability risks and the appropriate policies to mitigate them, as well as looking at recent movements in the U.S. dollar and the timing, form, and impact of interest rate normalization by the Fed.

A more detailed report on the U.S. economy and on the financial sector will be available on July 8.

Continue reading “U.S. Economy Returning to Growth, but With Pockets of Vulnerability” »

By IMFBlog| June 4th, 2015|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Employment, Finance, Financial Crisis, Fiscal policy, Government, growth, Inequality, Politics, Reform|

Contours of Macroeconomic Policy in the Future

By Olivier Blanchard

Seven years since the onset of the global financial crisis, we are still assessing how the crisis should change our views about macroeconomic policy. To take stock, the IMF organized two conferences, the first in 2011, the second in 2013, and published the proceedings in two books, titled "In the Wake of the Crisis" and "What Have We Learned?".

The time seems right for a third assessment. Research has continued, policies have been tried, and the debates have been intense. But have we truly made much progress? Are we closer to a new framework? To address these questions, Raghuram Rajan, Ken Rogoff, Larry Summers and I are organizing a third conference, "Rethinking Macro Policy III: Progress or Confusion?" that will take place on April 15-16 at the IMF.

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By IMFBlog| April 2nd, 2015|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Investment, Multilateral Cooperation, Uncategorized|

Good Governance Curbs Excessive Bank Risks

By Luis Brandão-Marques, Gaston Gelos, and Erik Oppers

The global financial crisis reminded us that banks often take risks that are excessive from society’s point of view and can damage the economy. In part, this is the result of the incentives embedded in compensation practices and of inadequate monitoring by stakeholders. Our analysis found the right policies could reduce banks risky behavior.

Our findings

In our latest Global Financial Stability Report we take stock of recent developments in executive pay, corporate governance, and bank risk taking, and conduct a novel empirical analysis.

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By IMFBlog| October 16th, 2014|Advanced Economies, Annual Meetings, Economic outlook, Economic research, Finance, Financial regulation, Fiscal policy, IMF, International Monetary Fund, Investment, Reform, Uncategorized|

Lost & Found in Eastern Europe: Replacing Funding by Western Europe’s Banks

There is little doubt the era of generous funding from Western Europe's banks to their subsidiaries in the East is over, but this doens't have to translate into a reduction of bank credit in the emerging economies of Europe. The IMF's latest analysis shows an increase in local deposits in most countries of the region has offset the withdrawal of funding from Western Europe.

By IMFBlog| June 13th, 2012|Advanced Economies, Economic Crisis, Emerging Markets, Finance, growth, IMF, International Monetary Fund|

How Iceland Recovered from its Near-Death Experience

When I traveled to Reykjavik in October 2008 to offer the IMF’s assistance, the situation there was critical. The country’s three main banks—which made up almost the entire financial system—had just collapsed within a week of each other. The sense of fear and shock were palpable—few, if any, countries had ever experienced such a catastrophic economic crash. Today, three years later, it is worth reflecting on how far Iceland―a country of just 320,000 people―has come since those dark days back in 2008.

By IMFBlog| October 26th, 2011|Advanced Economies, Economic Crisis, Financial Crisis, Financial regulation, growth, IMF, International Monetary Fund|

Tailwinds or Headwinds? Adjusting the Economic Sails in Latin America

As the European crisis lingers and advanced economies stall, the next six to eighteen months will be challenging for Latin America. Increased global uncertainties may create headwinds for the region—greater stress in the global economy and markets—tailwinds, if the advanced countries’ problems are tackled and economies spring back to life, or volatile gusts—weak growth and continued uncertainty—like we are seeing now. But it’s not easy to forecast the future of Latin America in these uncertain times, as we discuss in our just-published Regional Economic Outlook for Western Hemisphere. (Here I focus on Latin America, but our report covers the whole region, including North America, Central America, and the Caribbean.)

By IMFBlog| October 5th, 2011|Economic outlook, Economic research, International Monetary Fund, Latin America|

Global Growth Hits a Soft Patch

Despite a mild slowdown, the global economic recovery continues but the road to health will be a long one. Downside risks, both old and new, are increasing. Our world forecast is 4.3% growth for 2011, and 4.5% for 2012, so down by 0.1% for 2011, and unchanged for 2012, relative to April. This figure hides very different performances for advanced economies on the one hand, and for emerging and developing economies on the other.

By IMFBlog| June 17th, 2011|Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Employment, growth, IMF|

Reducing the Chance of Pulling the Plug on Liquidity

The near collapse of the financial system that set off the global crisis was due in part to financial institutions suddenly lacking access to funding markets, and liquidity drying-up across securities markets. Financial institutions did not factor in how their own responses to a liquidity shortfall could make the entire system shut down. But, it only takes a few institutions to pull the plug on a liquidity-filled bathtub before it runs dry, and the central bank needs to open the spigots again. The key then is to make sure that firms have less incentive to pull the plug. To do that, in the latest Global Financial Stability Report, we have come up with a way to measure how much an individual financial institution contributes to system-wide liquidity risk.

By IMFBlog| April 6th, 2011|Financial Crisis, Financial regulation, International Monetary Fund|

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