Search for other papers by International Monetary Fund. Monetary and Capital Markets Department in
Current site
Google Scholar
Abstract
This chapter assesses current financial market conditions and risks, in particular the effects of continued abundant global liquidity and improving credit quality on mature and emerging financial markets, and highlights the compression of inflation and credit risk premiums, and low volatility, that have been the key features across major markets. The external economic and financial environment for emerging markets has been exceptionally favorable. The domestic banking and financial systems of emerging market countries are showing signs of increased resilience as well. Many emerging market countries have appropriately used this environment to address vulnerabilities stemming from the level and structure of their liabilities. While financial markets and institutions remain resilient, risks could arise from growing global macroeconomic imbalances and the strong incentive for continued leveraged risk taking.
International Monetary Fund Copyright © 2010-2021. All Rights Reserved.