July 28, 2021

The IMF sees "complacent" markets before the rebound of financial risks

The IMF sees "complacent" markets before the rebound of financial risks


EFE

Bali (Indonesia)Updated:

The IMF warned on Wednesday that markets seem "complacent" about the possibility of «An abrupt adjustment» of financial conditions, although the risks of global financial stability have increased with trade tensions and monetary normalization in the US.

"In general, market participants seem complacent about the risks of an abrupt adjustment in financial conditions, "said Tobias Adrian, director of the Monetary Department of the International Monetary Fund (IMF), when presenting the report on" Global Financial Stability "in Bali (Indonesia).

To the commercial tensions between the US and China, Adrian added the possibility of a sudden outflow of capital from emerging markets by a boom in political uncertainty and attracted by the withdrawal of monetary stimulus in the advanced ones.

Specifically, the Fund encrypted up to 100,000 million dollars the capital flows that could come out of the emerging ones, excluding China, a volume not seen since the 2008 financial crisis.

To these "dangerous bottom current", the body led by Christine Lagarde added the doubts about a disorderly exit of the United Kingdom from the European Union in the process known as "brexit", which would result in a fragmentation of the capital market in Europe. . "New vulnerabilities have emerged and the resilience of the global financial system has yet to be proven," the report warned.

The annual IMF meeting that takes place on the tourist island of Bali, Indonesia, has highlighted the growing shadows for the global economy of the commercial tensions between the US and China, and this Tuesday downgraded the global growth forecasts to 3.7% for this year and next.

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