The rally could soon be over: The more reports, the International monetary Fund submits to, the clearer it is: A new crisis in the world economy cannot be ruled out.
Out of concern before a new financial crisis and growing wealth gap, the International monetary Fund (IMF) warns of a loosening of the rules for the financial markets. Under the current regulations, the markets and financial institutions ten years after the outbreak of the financial crisis stronger than before, said Tobias Adrian, Director, monetary and capital markets at the IMF, on Wednesday at the presentation of the report on financial market stability in Nusa Dua (Indonesia).
In countries such as the USA, it was last seen in the efforts to let the financial market participants more leeway. However, new risks have been added, such as extremely high prices of real estate in world cities such as London or New York. “Short-term risks have increased and medium-term risks remain elevated,” said Adrian of the Situation. The global trade disputes, and thereby undermines confidence of investors in China could be a Problem.
Better organization of the world trade urged
IMF Chief Christine Lagarde called on to the national level to ensure that the world trade have come more to the benefit of human beings. “We must ensure that trade is effectively organised to deliver for the people results,” she said. Previously about the IMF had made chief economist Maury Obstfeld attention to the fact that the currently observable global economic trends lead to further imbalances between the Poor and the rich. The US-caused a trade dispute would lead to a decline in world trade and, consequently, to the risk that key sustainability objectives are achieved.
Adrian called on the developing and emerging countries to create financial buffers against emerging risks. The biggest danger is the strong Dollar with rapidly rising interest rates in the United States, which could lead to capital outflows from emerging countries. The US Central Bank Federal Reserve may have company at the end of the year, the fourth interest rate move this year.
Problems due to high debts
A major Problem for industrialized countries is, according to Adrian, the high debt, especially outside the banking sector. “The level of debt that households, companies and countries is high and continues to rise.” Together 29 countries with large financial sectors, a debt of 250 percent of their projected gross domestic product.
It don’t count, however, just how much debts have a country, but also what standing on the side of the balance sheet, said IMF managing Director Vitor Gaspar, who presented on Wednesday the report on the fiscal policy. There is a lot of room for States to manage their balances better. “Governments could lift three per cent of the economic performance in revenue,” said Gaspar. Especially, transparency must be created so that the citizens about the actual welfare situation in their country to be informed. This applies particularly for countries with many natural resources such as Russia.
ul/hb (dpa)