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The International Monetary Fund (IMF) released its biannual Global Financial Stability Report this week, outlining recommendations for the financial sector to recover from the credit crisis.
The critical challenge facing the sector, the IMF said, is to mitigate the risks of an “even more wrenching adjustment” through preparing and administering appropriate contingency and remediation plans.
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“The immediate challenge is to reduce the duration and severity of the crisis,” the report said. “Actions that focus on reducing uncertainty and strengthening confidence in mature market financial systems should be the first priority.”
Looking at all key sector stakeholders, the IMF recommended that monetary authorities review their operational policies to improve the functioning of interbank markets and better distribute liquidity.
The IMF also said the private sector could contribute through embracing initiatives such as improved transparency and disclosure, standardisation of structured finance products and improved overall risk management.
Published: 09-03-08
