Global Financial Stability Report, October 2019: Lower for Longer
Global Financial Stability Report, October 2019
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- Global Financial Stability Report, October 2019: Lower for Longer
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Bibliographic details
- Published: October 16, 2019
Key vulnerabilities identified
- Rise in corporate debt burdens.
- Increasing holdings of riskier and more illiquid assets by institutional investors.
- Growing reliance on external borrowing by emerging and frontier market economies.
- ESG issues that may materially affect corporate performance and give rise to financial stability risks via exposure of financial institutions and large losses from climate change.
Policy recommendations and mitigation measures
- Stricter supervisory and macroprudential oversight of firms.
- Strengthened oversight and disclosure for institutional investors.
- Implementation of prudent sovereign debt management practices and frameworks for emerging and frontier market economies.
- Policymakers to develop standards, foster disclosure and transparency, and promote integration of sustainability considerations into investments and business decisions.
- Discussion of central bank swap line arrangements and international reserves in the home economies of global non-US banks as possible mitigation tools for dollar funding stress.
Chapter 5 — Banks' US dollar funding fragility (summary of findings)
- Rising US dollar funding costs are associated with financial stress in the home economies of global non-US banks.
- Rising US dollar funding costs are associated with cutbacks in the supply of loans to countries that borrow in US dollars.
- Negative effects are amplified when US dollar funding is fragile and the share of US dollar assets in total assets is high.
- Emerging markets borrowing in US dollars are particularly vulnerable to cutbacks in cross-border lending because their ability to substitute into alternative funds in US dollars or even other currencies is limited.
Chapter 6 — Sustainable finance (summary of findings)
- ESG-related disclosure remains fragmented and sparse—partly because of associated costs, the often voluntary nature of disclosure, and lack of standardization.
- Investor interest in ESG factors has continued to rise in recent years.
- Sustainable finance faces the challenge of lack of standardization; policymakers have a role to play in developing standards, fostering disclosure and transparency, and promoting integration of sustainability considerations into investments and business decisions.
Source: Global Financial Stability Report, October 2019: Lower for Longer (IMF).
Content in this bundle
- Chapter 1
- Chapter 2
- Chapter 3
- Chapter 4
- Chapter 5
- Chapter 6
- GFSR Chapter 1 Oct. 2019
- GFSR Chapter 2 Oct. 2019 — Dataset Overview
- gfsr-oct-2019-ch3 — Dataset overview
- dataset overview
- Dataset overview
- Dataset: Chapter 5. Banks' Dollar Funding: A Source of Financial Vulnerability
- Executive Summary
- Foreword
- Global Financial Stability Report October 2019: Online Annex 1.1. Technical Note; October 16, 2019
- GLOBAL FINANCIAL STABILITY REPORT—Banks’ Dollar Funding: A Source of Financial Vulnerability
- Full Report
References
- Blog: Lower for Longer: Rising Vulnerabilities May Put Growth at Risk
- Blog: Global Banks May Grow More Vulnerable to a Dollar Disruption
- Blog: Connecting the Dots Between Sustainable Finance and Financial Stability
- Author: Evan Papageorgiou, IMF; Interviewer: Elizabeth Schulze, CNBC International
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