IMF report points to global economic recovery

A new report from the International Monetary Fund (IMF) has suggested that the global financial system is well on the way to recovery.

Published today (September 30th), the latest edition of the semi-annual Global Financial Stability Report claims that policy actions and a faster-than-expected growth in the world economy have strengthened financial markets.

The IMF has reduced the amount it expects to be written off globally in bad loans and investments by 15 per cent to $3.4 trillion (£2.1 trillion), although the organisation also warned that there are still many challenges ahead.

’We are on the road to recovery, but this does not mean that risks have disappeared,’ said Jose Vinals, director of the IMF’s monetary and capital markets Department.

’If we fail to meet the challenges still being faced by the financial system in the present crisis, we risk reigniting systemic risks and even derailing the economic recovery.’

The IMF’s publication states that commercial banks saw $1.3 trillion in asset writedowns in the first half of 2009 and potentially face another $1.5 trillion to come.

Prime minister Gordon Brown told the Labour conference in Brighton this week that financial markets will need ’morals’ to prevent a repeat of the economic crisis.
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