Tuesday, December 16, 2014

Links IMF blog: Ensuring financial stability when financial risks are rising

These are links to some interesting discussions on the IMF blog.

Responding to the heat. Credit: Instant Vantage via Compfight cc

Heat Wave: Rising Financial Risks in the United States

Policies aimed at increasing household consumption, capital investment and labor employment in the U.S could also be encouraging…excessive financial risk-taking. This heat map looks at signs of financial risk taking from three angles: valuation, issuance trends, and redemption risks. Conclusion: financial risk taking in corporate debt markets is rising and markets have begun to overvalue many assets. The IMF believes this is a wake-up call to not only U.S financial regulators to respond to rising financial stability risks, but the rest of the world.

A Tale of Two States—Bringing Back U.S. Productivity Growth

Efficiency is as much important as innovation in productivity growth. Oregon and New Mexico are highest ranked in U.S when it comes to innovation, but when it comes to efficiency, how effective firms and states are able to combine the innovative advantage with the factor inputs they own, Oregon and New Mexico fare differently. This score sheet has implications for policy – better educational attainment, more schooling, more research and development (R&D) and a bigger financial sector.

Good Governance Curbs Excessive Bank Risks

Excessive risks from banks can damage the economy but the right policies can help reduce bank’s risky behavior. Some policies that bankers should consider to reduce excessive risk are: aligning compensation practices with long-term performance such as paying bonuses with restricted stock; and should establish risk committees; boards should represent both the shareholders and creditors. The staff at the bottom of the ladder should be made to be responsible and understand the bank’s core values.

How Low-Income Countries Can Diversify and Grow

Pursuing export diversification and export-product quality upgrading is a gateway to growth for low-income countries. Diversification could be into new product lines or the development of a more balanced mix of existing products. These economies can take advantage of globalization and rapidly expanding markets in Asia – China in particular – and the sub-Saharan Africa.

No comments:

Post a Comment

Your comments here.