The IMF has released its new Global Financial Stability report. Here’s a look at what the IMF is watching in global financial markets.

Divergence Between Emerging And Advanced Economies

The first distinction that the IMF draws in its report is the relative strength and stability in advanced economies compared to the elevated risk levels in emerging markets. The IMF believes that the rapid credit creation that many emerging market economies used to weather the Financial Crisis now makes these economies vulnerable to a tightening of global financial conditions.

While developed market banks have spent the years since the crisis increasing balance sheet quality, the IMF notes that banks in China are just now beginning to address “asset quality challenges.”

Triad Of Challenges

The IMF sees…

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