International Monetary Fund. Monetary and Capital Markets Department
INTERNATIONAL MONETARY FUND
Published twice yearly, the Global Financial Stability Report (GFSR) was created to provide a more frequent assessment of global financial markets by the IMF and to address emerging market financing in a global context. It provides timely analysis of developments in both mature and emerging market countries and seeks to identify potential fault lines in the global financial system that could lead to crisis. The GFSR aims to deepen its readers' understanding of global capital flows, which play a critical role as an engine of world economic growth. Of key value, the report focuses on current conditions in global financial markets, highlighting issues of financial imbalances, and of a structural nature, that could pose risks to financial market stability and sustained market access by emerging market borrowers.
Financial risks have increased and underlying conditions have worsened since the April 2007 Global Financial Stability Report (GFSR). The period ahead may be difficult, as bouts of turbulence are likely to recur and the adjustment process will take some time. Uncertainty about the final size of losses, and when and where they will be revealed, will likely continue to keep market sentiment and conditions unsettled in the near term. This chapter outlines a number of the causes and consequences of the recent episode of turmoil and offers some initial thoughts on possible responses that the private and public sectors might consider to help improve global financial resilience.
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