Global Financial Stability Report : IMF
The International Monetary Fund (IMF) released the latest global financial stability report.
Highlights of the report:
- It has warned about the risks to the global financial system from persistent high inflation, rising lending in the unregulated credit market, and increasing cyber-attacks on financial institutions.
- Geopolitical risks such as the ongoing war in West Asia and Ukraine could affect aggregate supply and lead to higher prices.
- In 2023, India was the second-largest recipient of foreign capital after the U.S. But things could change quickly if western central banks signal that they could keep interest rates high for a long time.
- In its report also noted that the growing unregulated private credit market, in which non-bank financial institutions lend to corporate borrowers, is a growing concern as troubles in the market might affect the broader financial system in the future.
- The borrowers in the private credit market may not be financially sound and noted that many of them do not have current earnings that exceed even their interest costs.
