Ten years have passed since the crisis that changed everything, and the wounds of the banks have not completely healed. The International Monetary Fund now makes a diagnosis with chiaroscuro of the global financial sector: it highlights its improvements – entities have more capital and liquidity than in the years of the storm – but insists on their unresolved vulnerabilities, such as the excessive level of debt of some customers and the decline in their value in the stock market.
"The growing debt of families and companies has left the banks of some countries exposed to customers with a high burden," he says. Global financial stability report presented in Bali. The text reminds that some countries have already taken measures to deal with these risks. In China, for example, the authorities are trying to reduce credit growth. And in France, measures are being put in place to limit the exposure of entities greater than 30,000 million dollars (26,000 million euros). These clients can be especially dangerous for banks now that interest rates are going to rise in several currency zones.
More potentially dangerous is still another trend that alerts the Fund. The combination of heavily indebted countries with high bond portfolios in the hands of banks is once again gaining momentum. This explosive mix could restart the vicious circle of public and private debt that had disastrous consequences in the Great Recession. In addition, some entities are very exposed to illiquid or opaque assets, the document warns.
But the IMF likes to start with the positive side. The organization led by Christine Lagarde praises the strengthening of the balance that the entities have made since the global financial crisis. And the reforms of the last decade have yielded some of the desired results: the new regulatory and supervisory framework has substantially improved the situation, the document highlights. However, the problems have not evaporated.
One of the concerns is the stock market. "In the euro zone, China, Japan and the United Kingdom, the ratio between value added and the price recorded in books is less than one," says the document, which is a touch of attention on the loss of value in the market of some entities. "If market valuations are used to calculate capital ratios, some banks would have an adjusted market capitalization of less than 3%, the minimum level," he adds.
The IMF lists another way to check the health of banks: with simulations of capital ratios in periods of difficulty, the famous stress tests. "Although the latest simulation of capital needs is now well below that before and during the crisis, the results suggest that some bank balance sheets could be further strengthened," the document concludes.