English | دری

IMF warns of instability in the global financial system

in International Business

IMF warns of instability in the global financial system

In its latest Global Financial Stability Report, published every six months, the International Monetary Fund (IMF) said the global financial risks have increased in the past six months despite the measures taken by the policymakers to make the financial system safer.

The Fund’s main concern was the situation in the Eurozone.

The Eurozone recently made “significant efforts” to tackle the debt crisis by offering cheap loans to banks and launching the European Stability Mechanism (ESM), the bloc’s new permanent fund to bail out struggling economies and banks.

On top of that, the European Central Bank’s chief Mario Draghi announced that he was prepared to do whatever it took to save the Euro in the summer, a statement that helped allay investors’ biggest fears.

Yet, risks to financial stability have increased since April.

It said concerns about countries leaving the Eurozone had led to “capital flight” away from the bloc that “undermined the very foundation of the union”.

The Fund said the financial systems of the Eurozone are overly complex that is pulling the institutions bank from getting closer to desirable features.

The next two regions that have added to the instability are the US and Japan.

The US is suffering from a fiscal cliff, and Japan is suffering from high budget deficits and record debt levels, as well a “growing interdependence” between banks and the state.

Measures to address these issued are needed immediately, recommended the IMF.

On Monday, the IMF downgraded its forecast for global growth.

It estimated growth in 2013 to be 3.6%, down from 3.9% in its previous forecast in July. This included sharp downgrades for the UK, Brazil and India.



Related Articles

Date set for hearing over Samsung phone ban

Apple’s legal motion did not stop after the recent verdict required Samsung to pay Apple more than USD 1bn for

David Cameron arrives in Japan for start of Asia tour

The prime minister has arrived in Tokyo, Japan, on the first stop of a visit to East and South East

EU vision for the future revealed

EU unveils its vision for the future of monetary union. This new vision allows European authorities greater powers including the

No comments

Write a comment
No Comments Yet! You can be first to comment this post!

Write a Comment

Your e-mail address will not be published.
Required fields are marked*

Time limit is exhausted. Please reload the CAPTCHA.