{ "title": "The Last Mile: Financial Vulnerabilities and Risks", "publication": "Global Financial Stability Report, April 2024", "sourceUrl": "https://www.imf.org/en/publications/gfsr/issues/2024/04/16/global-financial-stability-report-april-2024", "canonical": "https://www.imf.org/en/publications/gfsr/issues/2024/04/16/global-financial-stability-report-april-2024", "overlayPath": "/en/publications/gfsr/issues/2024/04/16/global-financial-stability-report-april-2024/index.md", "summary": "Chapter 1 highlight the near-term global financial stability risks have receded amid expectations that global disinflation is entering its last mile. However, along it, there are several salient risks and a build-up of medium-term vulnerabilities.", "sections": [ { "heading": "Overview", "content": "- Near-term risks to global financial stability have receded as disinflation is entering its last mile, but medium-term vulnerabilities are mounting.\n- The report contains three chapters:\n - Chapter 1: Financial Fragilities along the Last Mile of Disinflation\n - Chapter 2: The Rise and Risks of Private Credit\n - Chapter 3: Cyber Risk: A Growing Concern for Macrofinancial Stability" }, { "heading": "Chapter 1 — Financial Fragilities along the Last Mile of Disinflation", "content": "- Expectations that global disinflation is entering its “last mile” and monetary policy will be easing have eased financial conditions worldwide since the October 2023 Global Financial Stability Report.\n- Emerging markets have shown resilience, and some frontier economies have issued international debt.\n- The global economy appears increasingly likely to achieve a soft landing, and cracks in the financial system exposed by high interest rates have not ruptured further.\n- Near-term global financial stability risks have receded.\n- Salient risks along the last mile include:\n - Growing strains in the commercial real estate sector.\n - Signs of credit deterioration among corporates that could be exacerbated by adverse shocks.\n - The risk that stalling disinflation could surprise investors, leading to a repricing of assets and a resurgence of financial market volatility.\n - A continued accumulation of debt in both public and private sectors as a notable medium-term vulnerability." }, { "heading": "Chapter 2 — The Rise and Risks of Private Credit", "content": "- Private credit is a rapidly growing asset class—traditionally focused on providing loans to mid-sized firms outside the realms of either commercial banks or public debt markets—that now rivals other major credit markets in size.\n- Important vulnerabilities identified:\n - Relatively fragile borrowers.\n - A growing share of semi-liquid investment vehicles.\n - Multiple layers of leverage.\n - Stale and potentially subjective valuations.\n - Unclear connections between participants.\n- Risk assessment:\n - If private credit remains opaque and continues to grow exponentially under limited prudential oversight, these vulnerabilities could become systemic.\n- Policy recommendations and supervisory considerations:\n - Authorities could consider a more proactive supervisory and regulatory approach to private credit.\n - Close data gaps and enhance reporting requirements to comprehensively assess risks.\n - Closely monitor and address liquidity and conduct risks in funds—especially retail—that may be faced with higher redemption risks." }, { "heading": "Chapter 3 — Cyber Risk: A Growing Concern for Macrofinancial Stability", "content": "- Against a backdrop of growing digitalization, evolving technologies, and rising geopolitical tensions, cyber risks are on the rise.\n- While cyber incidents have thus far not been systemic, the risk of extreme losses from such incidents has increased.\n- The financial sector is highly exposed; a severe cyber incident could pose macro-financial stability risks through:\n - A loss of confidence.\n - Disruption of critical services.\n - Spillovers to other institutions through technological and financial linkages.\n- Current gaps and needs:\n - Cyber policy frameworks remain generally inadequate, especially in emerging market and developing economies.\n - Reporting of cyber incidents should be strengthened to allow for more effective monitoring of cyber risks.\n- Recommended measures to strengthen cyber resilience:\n - Develop adequate national cybersecurity strategies.\n - Establish appropriate regulatory and supervisory frameworks.\n - Build a capable cybersecurity workforce.\n - Create domestic and international information-sharing arrangements.\n - Supervisors should hold board members responsible for managing the cybersecurity of financial firms and promoting a conducive risk culture, cyber hygiene, and cyber training and awareness.\n - Financial firms should develop and test response and recovery procedures.\n - National authorities should develop effective response protocols and crisis management frameworks." }, { "heading": "Media and Outreach", "content": "- IMF Financial Counsellor Tobias Adrian on the April 2024 Global Financial Stability Report — May 2, 2024 — 3:42\n- Press Briefing: Global Financial Stability Report, April 2024 — April 16, 2024 — 52:17\n- The Rise and Risks of Private Credit — April 10, 2024 — 50:52\n- Cyber Risk: A Growing Concern for Macrofinancial Stability — April 9, 2024 — 57:53\n\nSource: Global Financial Stability Report — The Last Mile: Financial Vulnerabilities and Risks (April 2024).\n\n---\n\n Content in this bundle\n\n- Chapter 1 Data\n - Chapter 1 Data (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 1 Data (XLSX){rel=\"external\" type=\"application/vnd.openxmlformats-officedocument.spreadsheetml.sheet\"}\n- Dataset overview\n - Dataset overview (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Dataset overview (XLSX){rel=\"external\" type=\"application/vnd.openxmlformats-officedocument.spreadsheetml.sheet\"}\n- Chapter 3 Data\n - Chapter 3 Data (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 3 Data (XLSX){rel=\"external\" type=\"application/vnd.openxmlformats-officedocument.spreadsheetml.sheet\"}\n- Chapter 1\n - Chapter 1 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 1 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Chapter 2\n - Chapter 2 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 2 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Global Financial Stability Report, April 2024, “The Rise and Risks of Private Credit\"\n - Global Financial Stability Report, April 2024, “The Rise and Risks of Private Credit\" (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Global Financial Stability Report, April 2024, “The Rise and Risks of Private Credit\" (PDF){rel=\"external\" type=\"application/pdf\"}\n- ch3\n - ch3 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - ch3 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Chapter 3 Online Annex\n - Chapter 3 Online Annex (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 3 Online Annex (PDF){rel=\"external\" type=\"application/pdf\"}\n- Cyber Risk: A Growing Concern for Macrofinancial Stability\n - Cyber Risk: A Growing Concern for Macrofinancial Stability (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Cyber Risk: A Growing Concern for Macrofinancial Stability (PDF){rel=\"external\" type=\"application/pdf\"}\n- Executive Summary\n - Executive Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Executive Summary (PDF){rel=\"external\" type=\"application/pdf\"}\n- Foreword\n - Foreword (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Foreword (PDF){rel=\"external\" type=\"application/pdf\"}\n- Global Financial Stability Report — Key Highlights 2024 Apr\n - Global Financial Stability Report — Key Highlights 2024 Apr (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Global Financial Stability Report — Key Highlights 2024 Apr (PDF){rel=\"external\" type=\"application/pdf\"}\n- Full Report\n - Full Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Full Report (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Previous Issues\n- Blog by IMF Financial Counsellor Tobias Adrian\n- Podcast\n- Press Conference\n- https://origin-blogs.imf.org/en/blogs/articles/2024/04/08/fast-growing-usd2-trillion-private-credit-market-warrants-closer-watch\n- Replay the Event\n- https://origin-blogs.imf.org/en/blogs/articles/2024/04/09/rising-cyber-threats-pose-serious-concerns-for-financial-stability\n- Replay the Event\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/publications/gfsr/issues/2024/04/16/global-financial-stability-report-april-2024" } ], "bullets": [ "[Markdown version](/en/publications/gfsr/issues/2024/04/16/global-financial-stability-report-april-2024/index.md)", "[Structured JSON version](/en/publications/gfsr/issues/2024/04/16/global-financial-stability-report-april-2024/index.json)", "[Bundle manifest](/en/publications/gfsr/issues/2024/04/16/global-financial-stability-report-april-2024/bundle-manifest.json)", "Published: April 16, 2024", "Near-term risks to global financial stability have receded as disinflation is entering its last mile, but medium-term vulnerabilities are mounting.", "The report contains three chapters:", "Expectations that global disinflation is entering its “last mile” and monetary policy will be easing have eased financial conditions worldwide since the October 2023 Global Financial Stability Report.", "Emerging markets have shown resilience, and some frontier economies have issued international debt.", "The global economy appears increasingly likely to achieve a soft landing, and cracks in the financial system exposed by high interest rates have not ruptured further.", "Near-term global financial stability risks have receded.", "Salient risks along the last mile include:", "Private credit is a rapidly growing asset class—traditionally focused on providing loans to mid-sized firms outside the realms of either commercial banks or public debt markets—that now rivals other major credit markets in size.", "Important vulnerabilities identified:", "Risk assessment:", "Policy recommendations and supervisory considerations:", "Against a backdrop of growing digitalization, evolving technologies, and rising geopolitical tensions, cyber risks are on the rise.", "While cyber incidents have thus far not been systemic, the risk of extreme losses from such incidents has increased.", "The financial sector is highly exposed; a severe cyber incident could pose macro-financial stability risks through:", "Current gaps and needs:", "Recommended measures to strengthen cyber resilience:", "IMF Financial Counsellor Tobias Adrian on the April 2024 Global Financial Stability Report — May 2, 2024 — 3:42", "Press Briefing: Global Financial Stability Report, April 2024 — April 16, 2024 — 52:17", "The Rise and Risks of Private Credit — April 10, 2024 — 50:52", "Cyber Risk: A Growing Concern for Macrofinancial Stability — April 9, 2024 — 57:53", "**Chapter 1 Data**", "**Dataset overview**", "**Chapter 3 Data**", "**Chapter 1**", "**Chapter 2**", "**Global Financial Stability Report, April 2024, “The Rise and Risks of Private Credit\"**", "**ch3**", "**Chapter 3 Online Annex**", "**Cyber Risk: A Growing Concern for Macrofinancial Stability**", "**Executive Summary**", "**Foreword**", "**Global Financial Stability Report — Key Highlights 2024 Apr**", "**Full Report**", "[Previous Issues](https://www.imf.org/en/Publications/GFSR)", "[Blog by IMF Financial Counsellor Tobias Adrian](https://origin-blogs.imf.org/en/blogs/articles/2024/04/16/central-banks-must-remain-vigilant-along-the-last-mile-of-disinflation)", "[Podcast](https://www.imf.org/en/news/podcasts/all-podcasts/2024/04/15/gfsr-april-2024)", "[Press Conference](https://www.imf.org/en/Videos/view?vid=6351041605112)", "[https://origin-blogs.imf.org/en/blogs/articles/2024/04/08/fast-growing-usd2-trillion-private-credit-market-warrants-closer-watch](https://origin-blogs.imf.org/en/blogs/articles/2024/04/08/fast-growing-usd2-trillion-private-credit-market-warrants-closer-watch)", "[Replay the Event](https://www.imf.org/en/Videos/view?vid=6350632166112)", "[https://origin-blogs.imf.org/en/blogs/articles/2024/04/09/rising-cyber-threats-pose-serious-concerns-for-financial-stability](https://origin-blogs.imf.org/en/blogs/articles/2024/04/09/rising-cyber-threats-pose-serious-concerns-for-financial-stability)", "[Replay the Event](https://www.imf.org/en/Videos/view?vid=6350581746112)" ], "related": [ { "title": "Chapter 1 Data", "role": "dataset", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/data/ch1data.xlsx", "summary": { "path": "/-/media/files/publications/gfsr/2024/april/data/ch1data.xlsx.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/april/data/ch1data.xlsx", "mime": "application/vnd.openxmlformats-officedocument.spreadsheetml.sheet" } }, { "title": "Dataset overview", "role": "dataset", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/data/ch2data-updated.xlsx", "summary": { "path": "/-/media/files/publications/gfsr/2024/april/data/ch2data-updated.xlsx.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/april/data/ch2data-updated.xlsx", "mime": "application/vnd.openxmlformats-officedocument.spreadsheetml.sheet" } }, { "title": "Chapter 3 Data", "role": "dataset", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/data/ch3data.xlsx", "summary": { "path": "/-/media/files/publications/gfsr/2024/april/data/ch3data.xlsx.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/april/data/ch3data.xlsx", "mime": "application/vnd.openxmlformats-officedocument.spreadsheetml.sheet" } }, { "title": "Chapter 1", "role": "chapter", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch1.pdf", "summary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch1.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch1.pdf", "mime": "application/pdf" } }, { "title": "Chapter 2", "role": "chapter", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch2.pdf", "summary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch2.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch2.pdf", "mime": "application/pdf" } }, { "title": "Global Financial Stability Report, April 2024, “The Rise and Risks of Private Credit\"", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch2execsum.pdf", "summary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch2execsum.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch2execsum.pdf", "mime": "application/pdf" } }, { "title": "ch3", "role": "chapter", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch3.pdf", "summary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch3.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch3.pdf", "mime": "application/pdf" } }, { "title": "Chapter 3 Online Annex", "role": "online-annex", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch3onlineannex.pdf", "summary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch3onlineannex.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/april/english/ch3onlineannex.pdf", "mime": "application/pdf" } }, { "title": "Cyber Risk: A Growing Concern for Macrofinancial Stability", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch3sum.pdf", "summary": { "path": 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