Global Financial Stability Report, April 2016: Potent Policies for a Successful Normalization

April 11, 2016

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Global Financial Stability Report, April 2016: Potent Policies for a Successful Normalization, (USA: International Monetary Fund, 2016) accessed December 22, 2024

Summary

The current Global Financial Stability Report (April 2016) finds that global financial stability risks have risen since the last report in October 2015. The new report finds that the outlook has deteriorated in advanced economies because of heightened uncertainty and setbacks to growth and confidence, while declines in oil and commodity prices and slower growth have kept risks elevated in emerging markets. These developments have tightened financial conditions, reduced risk appetite, raised credit risks, and stymied balance sheet repair. A broad-based policy response is needed to secure financial stability. Advanced economies must deal with crisis legacy issues, emerging markets need to bolster their resilience to global headwinds, and the resilience of market liquidity should be enhanced. The report also examines financial spillovers from emerging market economies and finds that they have risen substantially. This implies that when assessing macro-financial conditions, policymakers may need to increasingly take into account economic developments in emerging market economies. Finally, the report assesses changes in the systemic importance of insurers, finding that across advanced economies the contribution of life insurers to systemic risk has increased in recent years. The results suggest that supervisors and regulators should take a more macroprudential approach to the sector.

Subject: Banking, Emerging and frontier financial markets, Financial institutions, Financial markets, Financial sector policy and analysis, Insurance, Insurance companies, Spillovers, Systemic risk

Keywords: Africa, Asset portfolio, Commodity, Cross-asset correlation, Emerging and frontier financial markets, Emerging market economies, Emerging market economy, Emerging market economy assets, Equity market spillover, Equity price, Europe, Financial condition, Fiscal policy setting, GFSR, Global, Heightened market volatility, Index weight, Insurance, Insurance companies, Market liquidity risk, Middle East, Monetary policy, North America, Reform, Reform agenda, Return on equity, Revenue diversification, Risk appetite, Services market, Spillovers, Systemic risk

Publication Details

Pages:

134
Volume:

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DOI:

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Issue:

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Series:

Global Financial Stability Report No. 2016/001
Stock No:

GFSREA2016001
ISBN:

9781513506777
ISSN:

1729-701X

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