Here Is The IMF’s Global Financial Crash Scenario

 

Hidden almost all the way in the end of the first chapter of the IMF’s latest Financial Stability Report, is a surprisingly candid discussion on the topic of whether “Rising Medium-Term Vulnerabilities Could Derail the Global Recovery”, which is a politically correct way of saying is the financial system on the verge of crashing.

In the section also called “Global Financial Dislocation Scenario” because “crash” sounds just a little too pedestrian, the IMF uses a DSGE model to project the current global financial sitution, and ominously admits that “concerns about a continuing buildup in debt loads and overstretched asset valuations could have global economic repercussions” and – in modeling out the next crash, pardon “dislocation” – the IMF conducts a “scenario analysis” to illustrate how a repricing of risks could “lead to a rise in credit spreads and a fall in capital market and housing prices, derailing the economic recovery and undermining financial stability.” Continue reading

China jitters could trigger global market bloodbath, IMF warns

Jitters over the health of the Chinese economy could trigger a bloodbath on financial markets if a hard landing materialises, the International Monetary Fund has warned.

The IMF said policy choices in the world’s second largest economy would also have “increasing implications for global financial stability” in the coming years as the country opens up its bond and equity markets.

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Bank of England adviser: ‘Everyone should have two bank accounts in case of cyber attack’

Banking expert warns cyber threat is so great we all need two accounts to guarantee access to cash

A leading banking academic and former adviser to the Bank of England has said everyone should have two bank accounts – so they can still access money if a major bank is crippled by a cyber attack.

Peter Hahn, senior fellow in banking at London’s Cass Business School, and between 2009 and 2014 a senior adviser to the Bank of England, said cyber crime was a new and growing risk which tended to be “not discussed”.

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