The global recovery has strengthened financial stability, but loose monetary and financial conditions against the background of sluggish inflation, to raise the medium-term risks, said Wednesday the international monetary Fund.
The IMF also noted that the risks are transferred from banks that have strengthened their balance sheets to financial markets as the compression of credit spreads, reduced volatility and rising asset prices.
“While an increased risk appetite and search for yield encouraged, and is the intended consequence of unconventional measures of monetary policy … there are risks if these tendencies go too far, said the IMF in its annual report on global financial stability.
For a long period of search for yield have increased the financial system’s sensitivity to market and liquidity risks, said the Fund, keeping these risks are elevated.
The IMF urged national regulators to carefully consider any proposal that will greatly ease capital and liquidity or prudential standards in “light of their potential damage to the agenda of global harmonization of regulation.”
Improve financial stability in the near future, supported by global economic recovery on a broad basis, the IMF said.
“Too rapid adjustment of the monetary policy may cause unwanted turbulence in the financial markets and reverse the progress towards inflation target, while maintaining low rates for too long can cause a dangerous buildup of market and credit risks,” said IMF..
“The key task facing politicians is to ensure that the buildup of financial vulnerabilities restrained, and monetary policy remains supportive of the global recovery – warned the IMF. – Otherwise, the increase in debt loads and over-valuation of assets can undermine the market’s confidence in the future that could jeopardize global growth.”
Information-analytical Department Forex club