IMF warns global financial stability is threatened

The short-term risks to financial stability remain low by historical standards and financial conditions are relatively low, especially in the United States, the IMF's semi-annual report said on Wednesday. on global financial stability. However, the vulnerabilities of several sectors are high, even among sovereigns and businesses, the entity said.

The IMF report covers six event-rich months for the financial markets, which experienced a sharp sell off of risky badets at the end of 2018. Global equities have rallied since the start of the year, helping to mitigate some of the following conditions: Stricter creditors upon liquidation, said the Fund.

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"Given the optimism of the market, financial vulnerabilities – such as a high leverage and liquidity, currency maturities and misalignments – may continue to increase, which increases the risks to medium term for global financial stability, "they explained.

"Given the optimism of the market, financial vulnerabilities, such as high debt, liquidity, maturities and misalignments of currencies, could continue to rise, which would increase medium-term risks for global financial stability, "said the IMF.

The report notes that vulnerabilities are increasing in the business sector United States and in non-bank financial intermediaries, while the impact is more pronounced in the sovereign sector of the euro area, where public debt is rising or continuing to increase in some countries. Household debt remains a concern in other advanced economies, the IMF said.

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