Good morning everyone and welcome to this press conference for the for 2018 global financial stability report it’s my pleasure today to introduce you to the panelists from the IMF’s monetary and capital markets department director Tobias Adrian deputy director Fabiana salucci and anna alina the head of the global markets analysis division which is the division that writes chapter one.
Two veers will summarize the main findings of.
The report and then we’ll be happy to take your questions if you’re watching us online please send your questions so that we can take them and you have the interpretation as needed yes.
Good morning would like to begin by thanking the Indonesian authorities for their thoughtfulness in hosting the annual meetings and would like to express our sincere condolences to the families of those who suffer during the recent earthquake and tsunami here in Indonesia our latest global financial stability.
Report finds that the global economic expansion remains strong.
Supported by still easy monetary policy the global financial system is stronger now than it was before the global financial crisis thanks to a decade of reform and recovery however financial imbalances continued to build up and the new financial system remains untested short-term risks to financial stability have increased and risks in the medium-term remain elevated so while there.
Are reasons for optimism this is no time for complacency since our last report six months ago the balance of risk in the economy has shifted to the downside global growth has plateaued trade tensions have escalated some emerging markets have experienced capital outflows and a surprise pressures in addition policy uncertainties have increased in the number.
Of countries in some advanced economies some investors have.
Grown over the confident and even complacent looking ahead financial stability risks could rise in the near term several potential developments could trigger a sharp tightening in financial conditions an intensification of concerns about the merger markets could lead to larger capital flows a broader escalation of trade tensions could discourage investment and sow risk appetite in financial markets an increase in policy uncertainty could undermine investor confidence and a faster than anticipated normalization of monetary policy could dampen real activity and lead.
In asset markets any of those concerns could become trigger events that could expose the vulnerabilities that have been building during years of cognitive monetary policy this new report outlines a range of concerns first the level of debt.
Held by governments companies and households is high and rising the total debt of those.
Sectors in the key 29 countries with large financial systems has grown to about 250 percent.
Of their combined GDP second emerging markets and low-income economies have increased the borrowing from other countries countries are vulnerable to further capital flow pressures when they have large borrowings when they do not have adequate capital buffers or.
When they lack a strong domestic investor base our new capital flows at risk analysis suggests that in.