Global Financial Stability Report April 2004

The Global Financial Stability Report (GSFR), published twice a year by the IMF, provides timely analysis of developments in mature and emerging market countries and seeks to identify potential fault lines in the global financial system that could lead to crisis. The GFSR aims to deepen its readers’ understanding of global capital flows, which play a critical role as an engine of world economic growth. Along with the IMF’s semiannual World Economic Outlook, the GFSR is a key vehicle for the IMF’s multilateral surveillance. The Global Financial Stability Report was created to provide a more frequent assessment of global financial markets and to address emerging market financing in a global context. The report focuses on current conditions in global financial markets, highlighting issues of financial imbalances, and of a structural nature, that could pose risks to financial market stability and sustained market access by emerging market borrowers. The GFSR focuses on relevant contemporary issues, not attempting to be a comprehensive survey of all potential risks. It also draws out the financial ramifications of economic imbalances highlighted by the IMF’s World Economic Outlook. It regularly contains, as a special feature, articles on structural or systemic issues relevant to international financial stability.

This September 2004 issue of the Global Financial Stability Report highlights that over the past six months, the global financial system, especially the health of financial intermediaries, has been further strengthened by the broadening economic recovery. The financial system has not looked as resilient as it does in the summer of 2004, in the three years since the bursting of the equity bubble. Financial intermediaries, banks and nonbanks alike, have strengthened their balance sheets to a point where they could, if necessary, absorb considerable shocks.

The Global Financial Stability Report (GSFR), published twice a year by the IMF, provides timely analysis of developments in mature and emerging market countries and seeks to identify potential fault lines in the global financial system that could lead to crisis. The GFSR aims to deepen its readers' understanding of global capital flows, which play a critical role as an engine of world economic growth. Along with the IMF's semiannual World Economic Outlook, the GFSR is a key vehicle for the IMF's multilateral surveillance. The Global Financial Stability Report was created to provide a more frequent assessment of global financial markets and to address emerging market financing in a global context. The report focuses on current conditions in global financial markets, highlighting issues of financial imbalances, and of a structural nature, that could pose risks to financial market stability and sustained market access by emerging market borrowers. The GFSR focuses on relevant contemporary issues, not attempting to be a comprehensive survey of all potential risks. It also draws out the financial ramifications of economic imbalances highlighted by the IMF's World Economic Outlook. It regularly contains, as a special feature, articles on structural or systemic issues relevant to international financial stability.

The April 2012 Global Financial Stability Report assesses changes in risks to financial stability over the past six months, focusing on sovereign vulnerabilities, risks stemming from private sector deleveraging, and assessing the continued resilience of emerging markets. The report probes the implications of recent reforms in the financial system for market perception of safe assets, and investigates the growing public and private costs of increased longevity risk from aging populations.

The Global Financial Stability Report (GSFR), published twice a year by the IMF, provides timely analysis of developments in mature and emerging market countries and seeks to identify potential fault lines in the global financial system that could lead to crisis. The GFSR aims to deepen its readers’ understanding of global capital flows, which play a critical role as an engine of world economic growth. Along with the IMF’s semiannual World Economic Outlook, the GFSR is a key vehicle for the IMF’s multilateral surveillance. The Global Financial Stability Report was created to provide a more frequent assessment of global financial markets and to address emerging market financing in a global context. The report focuses on current conditions in global financial markets, highlighting issues of financial imbalances, and of a structural nature, that could pose risks to financial market stability and sustained market access by emerging market borrowers. The GFSR focuses on relevant contemporary issues, not attempting to be a comprehensive survey of all potential risks. It also draws out the financial ramifications of economic imbalances highlighted by the IMF’s World Economic Outlook. It regularly contains, as a special feature, articles on structural or systemic issues relevant to international financial stability.

The current Global Financial Stability Report (April 2016) finds that global financial stability risks have risen since the last report in October 2015. The new report finds that the outlook has deteriorated in advanced economies because of heightened uncertainty and setbacks to growth and confidence, while declines in oil and commodity prices and slower growth have kept risks elevated in emerging markets. These developments have tightened financial conditions, reduced risk appetite, raised credit risks, and stymied balance sheet repair. A broad-based policy response is needed to secure financial stability. Advanced economies must deal with crisis legacy issues, emerging markets need to bolster their resilience to global headwinds, and the resilience of market liquidity should be enhanced. The report also examines financial spillovers from emerging market economies and finds that they have risen substantially. This implies that when assessing macro-financial conditions, policymakers may need to increasingly take into account economic developments in emerging market economies. Finally, the report assesses changes in the systemic importance of insurers, finding that across advanced economies the contribution of life insurers to systemic risk has increased in recent years. The results suggest that supervisors and regulators should take a more macroprudential approach to the sector.

The April 2018 Global Financial Stability Report (GFSR) finds that short-term risks to financial stability have increased somewhat since the previous GFSR. Medium-term risks are still elevated as financial vulnerabilities, which have built up during the years of accommodative policies, could mean a bumpy road ahead and put growth at risk. This GFSR also examines the short- and medium-term implications for downside risks to growth and financial stability of the riskiness of corporate credit allocation. It documents the cyclical nature of the riskiness of corporate credit allocation at the global and country levels and its sensitivity to financial conditions, lending standards, and policy and institutional settings. Another chapter analyzes whether and how house prices move in tandem across countries and major cities around the world—that is, global house price synchronicity.

The events of the past six months have demonstrated the fragility of the global financial system and raised fundamental questions about the effectiveness of the response by private and public sector institutions. The report assesses the vulnerabilities that the system is facing and offers tentative conclusions and policy lessons. The report reflects information available up to March 21, 2008.