IMF flags next global crisis

Added 12th October 2017

After recently publishing a rosy global economic outlook, the International Monetary Fund sketched the contours of the next financial crisis, urging policymakers to take measures to rein in exuberance.

IMF flags next global crisis

In a blog post, the director of the fund’s Monetary and Capital Markets Department Tobias Adrian warned that vulnerabilities to the financial system are rising, urging policy makers to “act now” and address them.

According to Adrian, easy central bank policy is “breeding complacency and allowing a further build-up of financial excesses”.

He added: “Non-financial borrowers are taking advantage of cheap credit to load up on debt. Investors are buying riskier and less liquid assets. If left unattended, these growing vulnerabilities will continue to mount, threatening to derail the economic recovery when shocks occur.”

Financial markets are at an increasing risk of violent market correction because of “too much money chasing too few high yielding assets,” he said.

“The result is that investors are taking more risks and exposing themselves to bigger losses if markets tumble.”

"Too much money is chasing too few high yielding assets"

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About Author

Tjibbe Hoekstra

Senior Reporter

Tjibbe joined Expert Investor as a senior reporter in March 2014. Before moving to London he worked as a financial news reporter for various news outlets in Amsterdam, including Reuters and ANP, the main news agency in the Netherlands. He also worked for Fondsnieuws, a website and magazine for finance professionals in the Netherlands. Tjibbe holds a MSc in Public Administration and a post-graduate diploma in Journalism.

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