IMF:financial vulnerabilities could derail recovery

CNC
Added On October 13, 2017

The International Monetary Fund has warned that rising financial vulnerabilities could derail the long-waited global recovery despite that the financial stability continues to improve.
   
The IMF issued its latest Global Financial Stability Report on Wednesday, noting how the global financial system continues to strengthen. 
 
It says the positive outlook is due to extraordinary policy support, regulatory enhancements, and a cyclical upturn in growth.
 
But the IMF warned that with so many nations attempting to boost inflation and pump up their economies, that rising asset valuations and higher leverage are growing risks.
 
The IMF added that the continued easy monetary and financial conditions are fueling investors' risk appetite.
 
The IMF also warned that risks, such as surge in inflation and a sudden jump in interest rates, could trigger market turbulence, which could lead investors exposing to bigger losses.
 
To avoid major shocks to the system, it suggests that major central banks should thoroughly explain their plans as they unwind their large fiscal support.