IMF Director Offers Roadmap to Secure Financial Stability

By iMFdirect: By José Viñals, Financial Counselor and Director of the IMF’s Monetary and Capital Markets Department Policymakers’ decisive actions since our last report in October have increased global financial stability by reducing acute risks.

iMFdirect submits: By José Viñals, Financial Counsellor and Director of the IMF’s Monetary and Capital Markets Department

By iMFdirect: By José Viñals, Financial Counsellor and Director, Monetary and Capital Markets Department, IMF We are back in the danger zone. Since the IMF’s previous Global Financial Stability Report, financial stability risks have increased substantially—reversing some of the progress that had been made over the previous three years.

The IMF said accommodative measures adopted by the Bank of England and other central banks, such as low interest rates and quantitative easing, had helped to stabilise the financial system, reports The Telegraph. However, it warned that the longer these policies – dubbed “MP-plus” – were in place, the greater the risk that negative effects could spill over to other parts of the economy.

By iMFdirect: By José Viñals Financial Counsellor and Director of the IMF’s Monetary and Capital Markets Department

From the conclusion to "How Effective is Fiscal Policy Response in Systemic Banking Crises?", by E. Baldacci, S. Gupta, and C. Mulas-Granados: This paper assessed the effects of fiscal policy responses during 118 episodes of systemic banking crises in advanced and emerging market economies.

By iMFdirect: By José Viñals, Financial Counsellor and Director - Monetary and Capital Markets Department Recent policy actions in Europe, the United States, in emerging markets, and here in Japan, where I'm attending the IMF-World Bank annual meetings, have improved investor sentiment and helped markets rebound in recent months.

iMFdirect submits: By José Viñals, Financial Counselor and Director - Monetary and Capital Markets Department Fearful financial markets, an uncertain growth outlook, fiscal anxieties, long unemployment lines….no other financial crisis since the Great Depression has led to such widespread dislocation in financial markets, with such abrupt consequences for growth, trade, and employment.