The director of the International Monetary Fund, Kristalina Georgieva, warned of increased risks to global financial stability and called to remain vigilant in the face of the potential implications of the banking crisis for the economy.
Georgieva made these statements in Beijing, in a speech offered on the occasion of her participation in the China Development Forum in which she acknowledged that the risks to financial stability have increased.
“At a time of higher debt levels, the rapid transition from a prolonged period of low interest rates to much higher rates needed to combat inflation inevitably creates stresses and vulnerabilities, as recent events in the banking sector demonstrate. in some advanced economies.
Georgieva thus referred to the banking crisis started by the fall of the US bank Silicon Valley Bank, which gave way to other banks declaring themselves in trouble.
In his opinion, “the authorities have acted decisively in response to risks to financial stability, and the central banks of advanced economies have improved the provision of liquidity in US dollars.”
These actions, he added, “have eased market tension to some degree, but uncertainty is high, underscoring the need for vigilance.”
The IMF will therefore continue to monitor developments “closely” and assess the potential implications for the economic outlook and global financial stability.
“We are paying close attention to the most vulnerable countries, particularly low-income countries with high levels of debt, and we will provide a detailed assessment in our next World Economic Outlook and Global Financial Stability report,” said the director.
On March 9, the bankruptcy of the American bank Silicon Valley Bank was known, which joined the bankruptcy carried out days before by Signature Bank, which unleashed strong turbulence in the world stock markets.
A few days later, a new crisis hit the Swiss bank Credit Suisse, which led to its purchase by UBS, with the backing of the authorities, and last week there was new turbulence in the markets due to the mistrust generated by the German Deutsche Bank, after announcing the redemption of subordinated debt before its maturity.
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