## Figure 1.2. Global Financial Stability Map: Assessment of Risks and Conditions (Notch changes since the April 2017 Global Financial Stability Report)

## Source details

**Canonical URL:** [Figure 1.2. Global Financial Stability Map: Assessment of Risks and Conditions (Notch changes since the April 2017 Global Financial Stability Report)](https://www.imf.org/-/media/files/publications/gfsr/2017/october/chapter-1/pdf-data/figure1-2.pdf)

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### Key findings (numbered summary from figure)
- 1. Macroeconomic risks have fallen, and macroeconomic conditions have improved.
- 2. Emerging market risks are lower, driven by improved fundamentals and external financing conditions.
- 3. Credit risks are unchanged, with improvements in the banking sector contrasting with increasing corporate and household sector risks.
- 4. Monetary and financial conditions remain accommodative, as slightly higher real rates are offset by easier lending conditions and financial conditions.
- 5. Risk appetite continues to increase, as reflected in robust capital flows to emerging markets and increased performance and allocations to risk assets.
- 6. Market and liquidity risks are unchanged, as compressed risk premiums and low volatility offset less-extended market positioning and improved trading liquidity conditions.

### Structure of the map and indicator counts
- Overall categories and counts shown on the x-axis (number in parentheses indicates number of individual indicators within each subcategory):
  - Overall (8)
  - Overall (10)
  - Domestic fundamentals (4)
  - Volatility (2)
  - Corporate financing (2)
  - External financing (2)
  - Macroeconomic conditions (4)
  - Uncertainty (2)
  - Inflation or deflation risks (1)
  - Sovereign risks (1)
  - Overall (3)
  - Asset allocation preferences (1)
  - Excess returns (1)
  - Flows to risky assets (1)
  - Overall (11)
  - Banking sector (4)
  - Household sector (3)
  - Corporate sector (4)
  - Overall (12)
  - Liquidity and funding (5)
  - Volatility (2)
  - Valuations (3)
  - Position and correlation risks (2)
  - Overall (6)
  - Monetary policy conditions (3)
  - Financial conditions index (1)
  - Lending conditions (1)
  - Central bank balance sheet (1)

### Directional assessments and annotations (as presented)
- Axes and labels indicated in the figure:
  - Horizontal axis: Easier ← → Tighter
  - Vertical axis: Lower risk ← → Higher risk
- Notch-change legend and example annotations:
  - Higher risk / Lower risk / Unchanged statuses appear across categories.
  - For lending conditions, positive values represent a slower pace of tightening or faster easing.
  - Overall notch changes are the simple average of notch changes in individual indicators.

### Notes on methodology (as presented)
- Changes in risks and conditions are based on a range of indicators, complemented by IMF staff judgment.
- Reference to methodology: Annex 1.1 in the April 2010 Global Financial Stability Report and Dattels and others 2010 describe the methodology underlying the global financial stability map.
- Overall notch changes equal the simple average of notch changes in individual indicators.

*Source: IMF staff estimates.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2017/october/chapter-1/pdf-data/figure1-2.pdf_