Fault Lines in Global Financial Stability: Reading the Global Financial Stability Report of October 2019

Abstract

Each year in April and October, the International Monetary Fund (IMF) comes up with two of its flagship publications, viz., the World Economic Outlook (WEO), and the Global Financial Stability Report (GFSR), coinciding with the Spring and the Annual Meetings of the IMF. While the WEO is a product of the Research Department of the IMF, the GFSR is coordinated by the Monetary and Capital Markets (MCM) Department. Often in the media attention on the WEO, the coverage of the GFSR gets somewhat lost, perhaps unjustifiably. The recent GFSR, which was published on October 18, 2019, is an outstanding report with rich analytical content as well as well-informed market perception. Spanning over seven chapters and covering issues as diverse as, global corporate vulnerabilities, institutional investors, emerging and frontier market, banks’ dollar funding, and sustainable finance, the report does justice both to the depth and the breadth of these issues. Many of these issues are beyond the scope of the current commentary. Instead, the present article looks into some fault lines of contemporary global financial stability, as revealed in the current GFSR.