## Global Financial Stability Report, April 2023: Safeguarding Financial Stability amid High Inflation and Geopolitical Risks _Global Financial Stability Report, April 2023_ ## Source details **Canonical URL:** [Global Financial Stability Report, April 2023: Safeguarding Financial Stability amid High Inflation and Geopolitical Risks](https://www.imf.org/en/publications/gfsr/issues/2023/04/11/global-financial-stability-report-april-2023) ## Other formats - [Markdown version](/en/publications/gfsr/issues/2023/04/11/global-financial-stability-report-april-2023/index.md) - [Structured JSON version](/en/publications/gfsr/issues/2023/04/11/global-financial-stability-report-april-2023/index.json) - [Bundle manifest](/en/publications/gfsr/issues/2023/04/11/global-financial-stability-report-april-2023/bundle-manifest.json) ## Bibliographic details - Published: April 11, 2023 --- ### Overview - Financial stability risks have increased rapidly as the resilience of the global financial system has faced multiple tests. - Recent turmoil in the banking sector highlights challenges from the interaction between tighter monetary and financial conditions and the buildup in vulnerabilities since the global financial crisis. - The emergence of stress in financial markets complicates central banks’ tasks while inflationary pressures are proving to be more persistent than anticipated. - Large emerging markets have so far avoided adverse spillovers, but smaller and riskier economies continue to confront worsening debt sustainability trends. ### Chapter 1 — A Financial System Tested by Higher Inflation and Interest Rates - Analyzes recent turmoil in the banking sector and the interaction between tighter monetary and financial conditions and the buildup in vulnerabilities since the global financial crisis. - Notes that stress in financial markets complicates central banks’ mandate at a time of more persistent-than-anticipated inflationary pressures. - Observes that large emerging markets have so far avoided adverse spillovers. - Finds that smaller and riskier economies continue to confront worsening debt sustainability trends. ### Chapter 2 — Nonbank Financial Intermediaries: Vulnerabilities amid Tighter Financial Conditions - NBFIs play a key role in the global financial system, enhancing access to credit and supporting economic growth. - Case studies show NBFI stress tends to emerge with: - elevated leverage, - liquidity mismatches, - high levels of interconnectedness that often spill over to emerging markets. - In the current environment of high inflation and tighter financial conditions, central banks face complex trade-offs during market stress between addressing financial stability risks and achieving price stability objectives. - Policy tools and recommendations: - Policymakers need appropriate tools to tackle financial stability consequences of NBFI stress. - Direct access to central bank liquidity for NBFIs could prove necessary in times of stress, but implementing appropriate guardrails is paramount. ### Chapter 3 — Geopolitics and Financial Fragmentation: Implications for Macro‑Financial Stability - Rising geopolitical tensions among major economies have intensified concerns about global economic and financial fragmentation. - Fragmentation could affect cross-border allocation of capital, international payment systems, and asset prices. - Potential macro-financial stability impacts include: - higher banks’ funding costs, - reduced bank profitability, - lower provision of credit to the private sector, - more limited opportunities for international risk diversification, - exacerbated capital flow and macro-financial volatility. - Policy implications and recommendations: - Policymakers should assess and quantify geopolitical shock transmission to financial institutions. - Financial institutions may need to hold adequate capital and liquidity buffers against rising geopolitical risks. - The global financial safety net needs strengthening through: - adequate levels of international reserves held by countries, - central bank liquidity swap arrangements, - precautionary credit lines from international financial institutions. ### Media and Release Information - Report publication month: April 2023. - Press Briefing: Global Financial Stability Report, April 2023 — April 11, 2023 — 47:03. - IMF Financial Counsellor Tobias Adrian on the April 2023 Global Financial Stability Report — 3:03. - The Cost of Fragmentation: Geopolitics and the Impact on the Global Economy in 2023 and Beyond — April 7, 2023 — 1:15:09. - Nonbank Financial Intermediaries: Vulnerabilities amid Tighter Financial Conditions — April 4, 2023 — 27:42. *Source: Global Financial Stability Report, April 2023 — https://www.imf.org/en/publications/gfsr/issues/2023/04/11/global-financial-stability-report-april-2023* --- ## Content in this bundle - **Chapter 1 Data** - [Chapter 1 Data (Markdown version)](/-/media/files/publications/gfsr/2023/april/data/ch1data.xlsx.md){rel="alternate" type="text/markdown"} - [Chapter 1 Data (XLSX)](/-/media/files/publications/gfsr/2023/april/data/ch1data.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **Chapter 2 Data** - [Chapter 2 Data (Markdown version)](/-/media/files/publications/gfsr/2023/april/data/ch2data.xlsx.md){rel="alternate" type="text/markdown"} - [Chapter 2 Data (XLSX)](/-/media/files/publications/gfsr/2023/april/data/ch2data.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **Chapter 3 Data** - [Chapter 3 Data (Markdown version)](/-/media/files/publications/gfsr/2023/april/data/ch3data.xlsx.md){rel="alternate" type="text/markdown"} - [Chapter 3 Data (XLSX)](/-/media/files/publications/gfsr/2023/april/data/ch3data.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **Chapter 1** - [Chapter 1 (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/ch1.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 1 (PDF)](/-/media/files/publications/gfsr/2023/april/english/ch1.pdf){rel="external" type="application/pdf"} - **CHAPTER 2 NONBANK FINANCIAL INTERMEDIARIES: VULNERABILITIES AMID TIGHTER FINANCIAL CONDITIONS** - [CHAPTER 2 NONBANK FINANCIAL INTERMEDIARIES: VULNERABILITIES AMID TIGHTER FINANCIAL CONDITIONS (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/ch2.pdf.md){rel="alternate" type="text/markdown"} - [CHAPTER 2 NONBANK FINANCIAL INTERMEDIARIES: VULNERABILITIES AMID TIGHTER FINANCIAL CONDITIONS (PDF)](/-/media/files/publications/gfsr/2023/april/english/ch2.pdf){rel="external" type="application/pdf"} - **Nonbank Financial Intermediaries: Vulnerabilities amid Tighter Financial Conditions** - [Nonbank Financial Intermediaries: Vulnerabilities amid Tighter Financial Conditions (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/ch2execsum.pdf.md){rel="alternate" type="text/markdown"} - [Nonbank Financial Intermediaries: Vulnerabilities amid Tighter Financial Conditions (PDF)](/-/media/files/publications/gfsr/2023/april/english/ch2execsum.pdf){rel="external" type="application/pdf"} - **Chapter 3** - [Chapter 3 (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/ch3.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 3 (PDF)](/-/media/files/publications/gfsr/2023/april/english/ch3.pdf){rel="external" type="application/pdf"} - **Chapter 3 — Geopolitics and Financial Fragmentation: Implications for Macro-Financial Stability** - [Chapter 3 — Geopolitics and Financial Fragmentation: Implications for Macro-Financial Stability (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/ch3execsum.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 3 — Geopolitics and Financial Fragmentation: Implications for Macro-Financial Stability (PDF)](/-/media/files/publications/gfsr/2023/april/english/ch3execsum.pdf){rel="external" type="application/pdf"} - **Chapter 3 Online Annex** - [Chapter 3 Online Annex (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/ch3onlineannex.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 3 Online Annex (PDF)](/-/media/files/publications/gfsr/2023/april/english/ch3onlineannex.pdf){rel="external" type="application/pdf"} - **Executive Summary** - [Executive Summary (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/execsum.pdf.md){rel="alternate" type="text/markdown"} - [Executive Summary (PDF)](/-/media/files/publications/gfsr/2023/april/english/execsum.pdf){rel="external" type="application/pdf"} - **Foreword** - [Foreword (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/foreword.pdf.md){rel="alternate" type="text/markdown"} - [Foreword (PDF)](/-/media/files/publications/gfsr/2023/april/english/foreword.pdf){rel="external" type="application/pdf"} - **Full Report** - [Full Report (Markdown version)](/-/media/files/publications/gfsr/2023/april/english/text.pdf.md){rel="alternate" type="text/markdown"} - [Full Report (PDF)](/-/media/files/publications/gfsr/2023/april/english/text.pdf){rel="external" type="application/pdf"} - **FY23-649800-SM23-Flagship-GFSR-Infographic_040723_v24** - [FY23-649800-SM23-Flagship-GFSR-Infographic_040723_v24 (Markdown version)](/-/media/files/publications/gfsr/2023/april/infographic/april-2023-gfsr-infographic.pdf.md){rel="alternate" type="text/markdown"} - [FY23-649800-SM23-Flagship-GFSR-Infographic_040723_v24 (PDF)](/-/media/files/publications/gfsr/2023/april/infographic/april-2023-gfsr-infographic.pdf){rel="external" type="application/pdf"} --- ## References - [Press Conference](https://www.imf.org/en/Videos/view?vid=6324500642112) - [Blog by Tobias Adrian](https://www.imf.org/en/Blogs/Articles/2023/04/11/global-financial-system-tested-by-higher-inflation-and-interest-rates) - [Blog by IMF staff](https://www.imf.org/en/Blogs/Articles/2023/04/04/nonbank-financial-sector-vulnerabilities-surface-as-financial-conditions-tighten) - [Panel discussion](https://www.imf.org/en/Videos/view?vid=6323948018112) - [Blog by IMF staff](https://www.imf.org/en/Blogs/Articles/2023/04/05/geopolitics-and-fragmentation-emerge-as-serious-financial-stability-threats) - [Panel Discussion](https://www.imf.org/en/Videos/view?vid=6324142584112) _Source: https://www.imf.org/en/publications/gfsr/issues/2023/04/11/global-financial-stability-report-april-2023_