August 5, 2021

The IMF warns of new risks in the financial system a decade after the crisis

The IMF warns of new risks in the financial system a decade after the crisis

The International Monetary Fund (IMF) warned today of new risks in the financial system before the demands to deregulate the sector, when it is a decade since the beginning of the crisis unleashed by the collapse of the American investment bank Lehman Brothers.

"As memories of the crisis fade, financial market participants and policy makers are increasingly tired of the demands of the new regulations, and some are even calling for a reversal," the IMF experts said in one of its analytical chapters of the global economy.

In this regard, the Fund warned that the reform agenda aimed at preventing another financial crisis "has not yet been fully implemented", and assured that "new risks" continue to emerge for global financial stability, such as attacks cybernetic

The Washington-based multilateral organization today released three analytical reports before the start of the annual IMF and World Bank (WB) annual meeting, to be held in Bali, Indonesia, from October 8 to 14.

"The objective of these chapters has been to see how the countries were affected," said Gian Maria Milesi-Ferretti, deputy director of the IMF's Research Department, "We want to take note of the mistakes to try to avoid falling back into them. in a conference with journalists.

The IMF warned on Monday that the global debt – both public and private – has reached a new record, reaching 182 trillion dollars (157 trillion euros).

In a speech, the director of the IMF, Christine Lagarde, explained two days ago that after a decade of "relatively easy" financial conditions, debt levels have reached new highs in advanced economies, emerging economies and countries with low incomes.

With these levels of global debt well above those at the time of the financial crisis in 2008, the IMF considered that there is a risk that unregulated parts of the financial system could trigger problems.

He also highlighted the existence of new threats, including cyber attacks on financial companies and the emergence of the techno-financial sector.

"Regulators should strive to encourage beneficial innovation while protecting from risks that could amplify shocks to the financial system," said the economists once again, "international cooperation will be vital."

The IMF will moderate its forecasts for global growth, which currently stand at 3.9% by 2018 and 2019, due to the current context of protectionist policies applied by the US, Lagarde advanced before the meeting in Bali, where a large part of the ministers of Finance and the world's central bankers will evaluate the health of the global economy.


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