Speed Limits for Financial Markets? Not So Fast

2019-03-25T15:06:55-04:00June 1, 2017|

By IMFBlog

June 1, 2017

Traders on the floor of the New York Stock Exchange (photo: Andrew Kelly/Reuters/Newscom)

On the afternoon of May 6, 2010, a financial tsunami hit Wall Street. Stunned traders watched as graphs on their computer screens traced the vertiginous 998-point plunge in the Dow Jones Industrial Average, which erased $1 trillion in market value in 36 minutes.

There was little in the way of fundamental […]

The Specter of Risk in the Derivatives of Bond Mutual Funds

2019-03-27T13:06:12-04:00December 17, 2015|

By Fabio Cortes

Current regulations only require U.S. and European bond mutual funds to disclose a limited amount of information about the risks they have taken using financial instruments called derivatives. This leaves investors and policymakers in the dark on a key issue for financial stability.  Our new research in the October 2015 Global Financial Stability Report looks at just how much is at stake.  […]

Flash Crashes and Swiss Francs: Market Liquidity Takes a Holiday

2019-03-27T17:05:44-04:00May 20, 2015|

GFSR

By José Viñals

Financial market liquidity can be fleeting. The ability to trade in assets of any size, at any time and to find a ready buyer is not a given.  As discussed in some detail last fall in this blog, a number of factors, including the evolving structure of financial markets and some regulations appear to have pushed liquidity into a new realm: markets look susceptible to episodes of high price volatility where liquidity […]

Warning—Falling (U.S. Treasury) Objects

2017-04-14T01:48:07-04:00February 12, 2015|

By Nigel Chalk and Jarkko Turunen

WHD.US Falling Yields.warningsignThe remarkable collapse in the price of oil—a key global price that has virtually halved in the space of just a few months—has received a lot of attention lately.

Meanwhile, another significant shift has taken place in recent months that is just as surprising and has wide-reaching global implications—the dramatic drop in long-term U.S. Treasury bond yields. The last time we saw 10-year Treasury bond yields this low […]

Emerging Markets & Volatility: Lessons from the Taper Tantrum

2017-04-14T01:49:31-04:00December 9, 2014|

By Ratna Sahay and Preya Sharma

You may hear a sigh of relief from emerging market watchers as we approach the end of the year. Yet, against the backdrop of a prolonged period of low interest rates in advanced economies, huge capital flows, and a slowdown in emerging market growth, 2015 promises to keep us all on our toes.  Differences in the timing of exit from unconventional monetary policy in advanced economies will have a global impact. The IMF has been keeping a close eye on developments in emerging markets, providing analysis […]

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