International Monetary Fund Global Financial Stability Report, 2015:Navigating Monetary Policy Challenges and Managing Risks

Chapter 1 Enhancing Policy Traction and Reducing Risks

Financial Stability Overview

Developments over the past six months have increased global financial stability risks. Risks have also rotated from advanced economies to emerging markets, from banks to shadow banks, and from solvency to market liquidity risks. The global financial system is being buffeted by a series of changes in financial markets, reflecting diverging growth patterns and monetary policies as global growth prospects have weakened. Disinflationary forces have strengthened as oil and commodity prices have dropped. Although the latter has benefited commodity- and oil-importing countries and increased the room to maneuver for monetary policy in countries with higher inflation, it has increased financial risks in some exporting countries and in the oil sector.