IMF reports on market turmoil

Report blames crisis on deficiencies in risk management, among others

WASHINGTON, DC – The International Monetary Fund (IMF) has released its report on the causes of the present market troubles. It draws a number of conclusions and lessons for future IMF surveillance.

Deficiencies in risk management, flawed methodologies on the part of credit rating agencies, and weaknesses in valuation disclosure and accounting were all singled out as areas of industry inadequacy.

For state institutions there were failures of equal magnitude. Central banks’ liquidity frameworks were singled out as an area for improvement. The crisis has highlighted the need to address illiquidity by broadening available collateral and counterparties, and using cross-border finance to draw from untapped liquidity pools.

For supervisors, there has been a failure to manage risks related to new and complex financial instruments, compounded by failures in consolidated supervision and underwriting standards. Recommendations include the review of capital requirements and other buffers to off-balance-sheet exposures and improvements to crisis management frameworks.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Financial crime and compliance50 2024

The detailed analysis for the Financial crime and compliance50 considers firms’ technological advances and strategic direction to provide a complete view of how market leaders are driving transformation in this sector

Investment banks: the future of risk control

This Risk.net survey report explores the current state of risk controls in investment banks, the challenges of effective engagement across the three lines of defence, and the opportunity to develop a more dynamic approach to first-line risk control

Op risk outlook 2022: the legal perspective

Christoph Kurth, partner of the global financial institutions leadership team at Baker McKenzie, discusses the key themes emerging from Risk.net’s Top 10 op risks 2022 survey and how financial firms can better manage and mitigate the impact of…

Emerging trends in op risk

Karen Man, partner and member of the global financial institutions leadership team at Baker McKenzie, discusses emerging op risks in the wake of the Covid‑19 pandemic, a rise in cyber attacks, concerns around conduct and culture, and the complexities of…

Moving targets: the new rules of conduct risk

How are capital markets firms adapting their approaches to monitoring and managing conduct risk following the Covid‑19 pandemic? In a Risk.net webinar in association with NICE Actimize, the panel discusses changing regulatory requirements, the essentials…

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here