## Global Financial Stability Report Update: Financial Conditions Have Eased, but Insolvencies Loom Large

_Global Financial Stability Report, June 2020_

## Source details

**Canonical URL:** [Global Financial Stability Report Update: Financial Conditions Have Eased, but Insolvencies Loom Large](https://www.imf.org/en/publications/gfsr/issues/2020/06/25/global-financial-stability-report-june-2020-update)

## Other formats

- [Markdown version](/en/publications/gfsr/issues/2020/06/25/global-financial-stability-report-june-2020-update/index.md)
- [Structured JSON version](/en/publications/gfsr/issues/2020/06/25/global-financial-stability-report-june-2020-update/index.json)
- [Bundle manifest](/en/publications/gfsr/issues/2020/06/25/global-financial-stability-report-june-2020-update/bundle-manifest.json)

## Bibliographic details
- Published: June 25, 2020

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### Overview
- Publication: Global Financial Stability Report Update
- Date: June 2020
- Main takeaway: Risk asset prices have rebounded following the precipitous fall early in the year, while benchmark interest rates have declined, leading to an overall easing of financial conditions.

### Market drivers and recent developments
- Swift and bold actions by central banks aimed at addressing severe market stress have boosted market sentiment.
- Asset purchases have been deployed in a number of emerging market countries for the first time, helping bring about the easing in financial conditions.
- A disconnect has emerged between financial markets and the evolution of the real economy, creating a vulnerability that could pose a threat to the recovery should investor risk appetite fade.

### Financial vulnerabilities and risks
- Other financial system vulnerabilities may be crystallized by the COVID-19 pandemic.
- High levels of debt may become unmanageable for some borrowers, and the losses resulting from insolvencies could test bank resilience in some countries.
- Some emerging and frontier market economies are facing refinancing risks, and market access has dried up for some countries.

### Policy implications and recommendations
- Authorities should continue to support the real economy while closely monitoring financial vulnerabilities.
- Safeguarding financial stability is necessary given the potential for insolvencies and testing of bank resilience.

*Source: Global Financial Stability Report Update, June 2020.*

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## Content in this bundle

- **Global Financial Stability Update; June 2020**
  - [Global Financial Stability Update; June 2020 (Markdown version)](/-/media/files/publications/gfsr/2020/update/june/english/gfsreng2020006.pdf.md){rel="alternate" type="text/markdown"}
  - [Global Financial Stability Update; June 2020 (PDF)](/-/media/files/publications/gfsr/2020/update/june/english/gfsreng2020006.pdf){rel="external" type="application/pdf"}

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## References

- [Financial Conditions Have Eased, but Insolvencies Loom Large](https://blogs.imf.org/2020/06/24/financial-conditions-have-eased-but-insolvencies-loom-large/)
- [IMF COVID-19 Hub](https://www.imf.org/en/Topics/imf-and-covid19)
- [Policy Tracker](https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19)
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_Source: https://www.imf.org/en/publications/gfsr/issues/2020/06/25/global-financial-stability-report-june-2020-update_