Global Financial Stability Report, October 2014: Risk Taking, Liquidity, and Shadow Banking: Curbing Excess while Promoting Growth

October 8, 2014

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Format: Chicago

Global Financial Stability Report, October 2014: Risk Taking, Liquidity, and Shadow Banking: Curbing Excess while Promoting Growth, (USA: International Monetary Fund, 2014) accessed September 19, 2024

Also available in: العربية, español, français, 日本語, русский, 中文

Summary

The October 2014 issue finds that six years after the start of the crisis, the global economic recovery continues to rely heavily on accommodative monetary policies in advanced economies. Monetary accommodation remains critical in supporting economies by encouraging economic risk taking in the form of increased real spending by households and greater willingness to invest and hire by businesses. However, prolonged monetary ease may also encourage excessive financial risk taking. Analytical chapters examine (1) the growth of shadow banking around the globe, assessing risks and discussing regulatory responses, and calling for a more encompassing (macroprudential) approach to regulation and for enhanced data provision; and (2) how conflicts of interest among bank managers, shareholders, and debt holders can lead to excessive bank risk taking from society’s point of view, finding no clear relation between bank risk and the level of executive compensation, but that a better alignment of bankers’ pay with long-term outcomes is associated with less risk.

Subject: Banking, Commercial banks, Credit, Emerging and frontier financial markets, Financial institutions, Financial markets, Financial sector policy and analysis, Financial services, Money, Mutual funds, Shadow banking, Systemic risk

Keywords: Africa, Asia and Pacific, Asset, Bank, Chief risk officer, Commercial banks, Commercial paper, Credit, Deficit economy, Director, Economy, Emerging and frontier financial markets, Equity valuation, Europe, Fixed income, GFSR, Global, Middle East, MSCI equity market market index, Mutual funds, Return on assets, Return on equity, Risk culture, Shadow banking, Shadow banking, Shape bank risk, Swap line, Systemic risk, Yield

Publication Details

Pages:

192
Volume:

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DOI:

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Issue:

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Series:

Global Financial Stability Report No. 2014/002
Stock No:

GFSREA2014002
ISBN:

9781498390811
ISSN:

1729-701X

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Notes

Executive summaries also available in Arabic, Chinese, Japanese, , French, , Russian, , and Spanish, .

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