Cover of the Global Financial Stability Report
World Economic and Financial Surveys

Global Financial Stability Report

Market Developments and Issues
September 2006

©2006 International Monetary Fund
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The Global Financial Stability Report provides semiannual assessments of global financial markets and addresses emerging market financing in a global context.*

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 Contents   
 
  Preface (220KB pdf file)
 
  Executive Summary (223KB pdf file)
 
Chapter I. Assessing Global Financial Risks (1,900KB pdf file)
  Global Financial Markets Remain Strong; Downside Risks Increase
  Market Corrections Highlight Pressure Points in Emerging Markets
  Looking Forward: Managing External Challenges
  Challenges for Policymakers
  Annex 1.1. Emerging Market Financing Flows
  Annex 1.2. Financial Systems in Mature and Emerging Markets
  Annex 1.3. Investment in Commodity Markets
  Annex 1.4. Structural Sources of U.S. Capital Inflows
  Annex 1.5. Recycling of Surpluses in Emerging Asia
  Annex 1.6. Foreign Investors’ Holdings of U.S. Securities
  References
Chapter II. Household Credit Growth in Emerging Market Countries (728KB pdf file)
  Macroeconomic, Financial, and Policy Linkages
  Recent Trends, Issues, and Potential Vulnerabilities
  Risk Management and Risk Transfer
  Legal and Regulatory Framework
  Conclusions and Policy Implications
  Annex: Description of Data
  References
 
Annex: Summing Up by the Chairman (220KB pdf file)
 
Statistical Appendix (1,700KB pdf file)
 
Boxes
1.1 The Yen Carry Trade
1.2 Does the Recent Increase in Stock Market Volatility Signal a Recession?
2.1 Extension of Emerging Market Household Credit by Foreign-Owned Banks
2.2 Using Macro- and Microlevel Data to Analyze Vulnerability of the Household Sector
2.3 Korean Credit Card Crisis and Its Resolution
2.4 Securitization of Household Credit: Approaches and Problems
 
Tables
1.1 Emerging Markets and Developing Countries: Current Account Balance and External Financing
1.2 Emerging Market External Financing
1.3 Asset Class Characteristics
1.4 Current Account and Capital Inflows: Emerging Asia
1.5 Net International Reserves: Leading Economies
1.6 Breakdown of Capital Outflows: Emerging Asia
1.7 Capital Outflows from Selected Asian Economies
1.8 Characteristics of Foreigners’ Portfolio Holdings of U.S. Assets
2.1 Predominant Types of Household Mortgage Interest Rates
2.2 Average Household Loan Interest Rates (in Local Currency)
2.3 Financial Assets and Liabilities of Households, End-2004
2.4 Ratio of Household Credit to Personal Disposable Income
2.5 House Price Changes
2.6 Gross Annual Issuance of Mortgage-Related Securitization
2.7 Regulation of Household Credit in Selected Emerging Markets
 
Figures
1.1 Corporate Earnings Growth
1.2 Global Equity Markets: Price/Earnings Ratio Indices
1.3 Corporate Bond Spreads
1.4 Term Structure of Interest Rate Expectations
1.5 Liquidity Measure and Market Volatility
1.6 Implied Volatilities
1.7 Equity Market Performance
1.8 Price Correlations Between Treasuries and S&P 500
1.9 Volatility and the Business Cycle
1.10 Leading Economic Indicator Indices
1.11 Inflation Volatility of the United States and the Slope of the Yield Curve
1.12 Breakeven Long-Term Inflation Rates
1.13 United States: Market-Derived Inflation Expectations
1.14 Bond Spreads and Implied Equity Volatility
1.15 Hedge Fund Performance and Emerging Asian Equities
1.16 U.S. Dollar Currency Options: Risk Reversals
1.17 United States: Real Effective Exchange Rate
1.18 Emerging Market Equity Performance
1.19 Relative Emerging Market Equity Performance
1.20 Emerging Market Asset Class Correlations
1.21 Crowded Trades in Local Markets
1.22 Emerging Market Credit Default Swap Spreads
1.23 Current Account and Currency Performance Versus the U.S. Dollar
1.24 Emerging Market Currency Performance Versus the U.S. Dollar
1.25 Adjusted EMBIG Spreads
1.26 Net Financing Flows to Middle- and Low-Income Countries
1.27 Cumulative Gross Annual Issuance of Bonds, Loans, and Equity
1.28 Gross Quarterly Issuance of Bonds, Loans, and Equity
1.29 Bond Issuance, by Issuer Type
1.30 Syndicated Loan Commitments, by Region
1.31 Equity Placements, by Region
1.32 Bond Issuance, by Region
1.33 Cumulative Net Flows into Emerging Market Equity Funds
1.34 Flows into Emerging Asian Equity Markets
1.35 Mexico: Nonresident Holdings of Local Equities
1.36 Brazil: Foreign Investment in the Stock Market
1.37 Turkey: Foreign Investment in the Stock Market
1.38 Share of FDI Flows from Emerging Markets to Other Emerging Market Countries
1.39 Probability of Multiple Defaults in Select Portfolios
1.40 Middle East and Central Asia: Annual Growth Rates in Credit to the Private Sector
1.41 Growth in Assets of Commodity Trading Advisors
1.42 Distribution of Monthly Total Returns for Commodities and Equities
1.43 Commodity Returns and U.S. Inflation
1.44 Performance of Selected Commodities
1.45 Brent Crude Oil Futures
1.46 Goldman Sachs Commodity Indices
1.47 Financing of the U.S. Current Account by Instrument
1.48 Foreign Holdings of Long-Term U.S. Securities
1.49 Foreign Holdings of U.S. Assets
2.1 Household Credit, End-2005
2.2 Credit to Households, Market Penetration, End-2005
2.3 Household Credit/GDP and GDP per Capita, End-2005
2.4 Share of Household Credit in Total Private Sector Credit, 2005
2.5 Annual Growth of Real Household Credit
2.6 Household Credit: Level in 2000 and Real Growth Rates, 2000–05
2.7 Share of Housing Loans in Total Household Credit, End-2005
2.8 Share of Foreign-Currency-Denominated Household Credit, End-2005
2.9 Share of Foreign Bank Assets in Total Bank Assets
2.10 Household Financial Leverage in Selected Countries, 2005
2.11 Household Financial Leverage in Selected Countries in Emerging Europe
2.12 Nonperforming Loans, 2005
2.13 Nominal Growth of Household Credit and Private Consumption Expenditures, 2000–05
2.14 Nominal Growth of Consumer Credit and Merchandise Imports, 2000–05
2.15 House Price Indices

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