WASHINGTON – The International Monetary Fund (IMF) said on Wednesday that economic recovery and the government’s continued support were expected to boost investor confidence, adding to the risk of a sharp fall in asset prices that could lead to financial stability. May be at risk.
Tobias Adrian, head of the Monetary and Capital Markets Department, and his deputy, Fabio Natalucci, wrote in a blog post: ” “Combined with seemingly homogeneous investor views, this increases the risk of market correction or re-creation.”
Despite this, he said, governments should continue to provide financial and financial support until sustainable recovery is achieved. “Reducing or withdrawing support at this stage could jeopardize the global economic recovery.”
The fund’s seminal global financial stability report, released on Wednesday, published a blog post with an update.
He said delays in vaccinations, especially in emerging economies, which account for about 65 percent of global growth, could lead to a worsening of the financial situation and an increase in the financial losses that remain. These include rising levels of corporate and government debt and declining profits in some banking systems.
“Delayed access to comprehensive healthcare solutions could mean incomplete global recovery and jeopardize the global financial system,” the report said. “Because growth is a key component to financial stability, uneven and partial recovery threatens the health of the financial system.”
As a result, policymakers face a dilemma. “Although there is still no substitute for continued monetary support, there are legitimate concerns about excessive risk-taking and market growth,” Adrian and Natalucci wrote. One answer would be to strengthen the oversight of financial institutions to prevent further construction of risks.
Wednesday’s report came after the IMF said on Tuesday that the global economy was poised for a strong recovery from the epidemic in 2021, initially shrinking significantly from last year’s fears. After – although he warns that this theory is subject to extraordinary uncertainty.
Global output is expected to grow 5.5 percent this year, upgraded to a 5.2 percent increase from the IMF’s October forecast. Last year’s estimate 3.5. It was down 3.5 percent from 4.4 percent in October.