Downside risks to house prices could also be relevant for monetary policymakers when forming their views on the downside risks to the economic and inflation outlook. Policymakers can use estimates of house prices at risk to complement other surveillance indicators of housing market vulnerabilities and guide macroprudential policy actions aimed at building buffers and reducing vulnerabilities. Favorable external financing conditions, such as falling global interest rates, supported debt portfolio flows to emerging markets and contributed to the decline of emerging market credit spreads. Brexit Event Study on Jumps and Market Liquidity, 1.1. The April 2019 Global Financial Stability Report (GFSR) finds that despite significant variability over the past two quarters, financial conditions remain accommodative. Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. All rights reserved. The IMF Press Center is a password-protected site for working journalists. Authorities considering measures to manage capital flows might also find such information useful when a surge in capital inflows increases downside risks to house prices and when other policy options are limited. Recent Developments in Emerging and Frontier Markets, 1.21. Downside risks to house prices could also be relevant for monetary policymakers when forming their views on the downside risks to the economic and inflation outlook. City- and Country-Level Comparisons of House Prices at Risk, 2.11. Policymakers urgently need to tackle financial vulnerabilities that could exacerbate the next economic downturn. Emerging markets borrowing in US dollars are particularly vulnerable to cutbacks in cross-border lending, because their ability to substitute into alternative funds in US dollars or even other currencies is limited. Financial markets have been buffeted by the twists and turns of trade disputes and growing investor concern about the global economic outlook. Euro Area Banks, Sovereign Shocks, and Nonperforming Loans, 1.18. Chapter 6 reports on the incorporation of environmental, social, and governance (ESG) principles into finance. The need to satisfy contingent calls arising from pension funds’ illiquid investments could constrain the traditional role they play in stabilizing markets during periods of stress. Accommodative conditions have fueled a buildup of financial vulnerabilities. continued to build in the sovereign, corporate, and non bank financial sectors in several systemically important countries, leading to elevated medium-term risks. Tracking the Corporate Credit Cycle: United States versus Europe, 1.10. Authorities considering measures to manage capital flows might also find such information useful when a surge in capital inflows increases downside risks to house prices and when other policy options are limited. As a result, financial vulnerabilities have continued to build in the sovereign, corporate, and non bank financial sectors in several systemically important countries, leading to elevated medium-term risks. Financial conditions have eased further and appear to be premised on expectations of additional monetary policy accommodation across the globe. The chapter discusses central bank swap line arrangements as well as international reserves in the home economies of global non-US banks as possible mitigation tools. Financial Stability Report December 2019 Financial Policy Summary ii • While lower risk-free interest rates will support global growth, monetary authorities have correspondingly less room to respond in the event of further shocks to the global outlook. ©2019 International Monetary Fund IMF CSF Creative Solutions Division Composition: AGS, An RR Donnelley Company Cataloging-in-Publication Data IMF Library Names: International Monetary Fund. Potential Fallout from the BBB Bond Downgrades on the US High-Yield Corporate Bond Market, 1.13. The measure of house prices at risk helps forecast downside risks to GDP growth and adds to early-warning models for financial crises. : Vulnerabilities in a Maturing Credit Cycle, IMF Members' Quotas and Voting Power, and Board of Governors, IMF Regional Office for Asia and the Pacific, IMF Capacity Development Office in Thailand (CDOT), IMF Regional Office in Central America, Panama, and the Dominican Republic, Financial Sector Assessment Program (FSAP), Currency Composition of Official Foreign Exchange Reserves, Weak Spots in Global Financial System Could Amplify Shocks, Assessing the Risk of the Next Housing Bust, 1.7. Credit Market Developments in the United States and Europe, 1.8. Gfsr | World global financial Development Database is based on a “ global financial stability report 2019 framework.! Cycle, 1.9 of Macroprudential and Monetary policy and Capital Flows on House Prices at Risk Shifts... Sovereign shocks, and governance ( ESG ) principles into finance leading stretched! 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