Global financial stability improved but hidden risks in the future

The International Monetary Fund (IMF) said Wednesday that global economic recovery has strengthened financial stability, but in the context of weak inflation, loose monetary and financial conditions are pulling up the medium-term risk.

Photo: January 2011, US dollars, euros, pounds, yuan, yen and Swiss francs and other currencies. REUTERS / Kacper Pempel
IMF also pointed out that the banking industry has strengthened its own balance sheet; but with the narrowing of credit spreads, volatility, asset prices rise, the risk is from the banking sector to the financial market. The IMF and the World Bank's fall meeting will be held later this week in Washington.

"While the increased risk appetite and the pursuit of profitability are the result of the adoption of non-traditional monetary policy measures and are expected to be expected ... but if these trends are too far ahead, there is a risk that" the IMF's global financial Stable report said.

IMF said the longer-term chase of income, has increased the financial system on the market and liquidity risk sensitivity, making these risks high.

The IMF urges national regulators to carefully consider any proposal that can significantly relax capital, liquidity or prudential regulatory standards, which may "damage the global harmonized regulatory agenda".