What is the Global Financial Stability Report?
The Global Financial Stability Report (GFSR) is a semiannual report by the International Monetary Fund (IMF) that assesses the stability of global financial markets and emerging-market financing. It is released twice per year, in April and October. The GFSR focuses on current conditions, especially financial and structural imbalances, that could risk an upset in global financial stability and access to financing by emerging-market countries. It emphasizes the ramifications of financial and economic imbalances that are highlighted in one of the IMF's other publications, the World Economic Outlook. Topics covered in the GFSR usually include systemic risk assessments in worldwide financial markets, worldwide debt management, emerging economic markets and current economic crises that could affect finances worldwide.
Understanding the Global Financial Stability Report (GFSR)
The Global Financial Stability Report (GFSR) replaced two previous reports by the IMF, the annual International Capital Markets Report and the quarterly Emerging Market Financing Report. The purpose of replacing them was to provide a more frequent assessment of the worldwide financial markets and to focus on emerging market financing in a global context. In addition to assessing the condition of worldwide markets, the GSFR also issues recommendations for central banks, policymakers and others who supervise global financial markets.
April 2018 GFSR
The April 2018 GFSR consisted of front matter and three chapters. The first chapter discussed the growth of short-term risks to global financial stability since the October 2017 GFSR. The April 2018 GFSR identified short- and medium-term risks as threats to global financial growth. Some of the threats identified in Chapter 1 of the April 2018 GFSR included high rates of inflation and central banks’ response to those higher inflation rates, rising interest rates, and higher market volatility.
Chapter 2 of the April 2018 discussed corporate credit allocation as a source of financial vulnerability for global markets. This chapter examines the riskiness of credit allocation across global economies ranging from advanced to emerging and makes recommendations to mitigate the risks associated with corporate credit allocation.
Chapter 3 of the April 2018 GFSR discusses the movement of house prices across various markets around the world, especially the synchronicity of those prices, or how they move in tandem with one another as prices rise and fall in housing markets around the world. This chapter looks at the effect that changing housing prices in one part of the world might have on housing prices elsewhere.