News release: “A year after the subprime market crisis erupted in the United States, triggering financial market turmoil around the world, global financial markets continue to be fragile and systemic risks remain elevated, the International Monetary Fund (IMF) said in its latest assessment.”
Global Financial Stability Report, Market Update, July 28, 2008: “Global financial markets continue to be fragile and indicators of systemic risk remain elevated. Credit quality across many loan classes has begun to deteriorate with declining house prices and slowing economic growth. Although banks have succeeded in raising additional capital, balance sheets are under renewed stress and bank equity prices have fallen sharply. This has made raising additional capital more difficult and increased the likelihood of a negative interaction between banking system adjustment and the real economy. At the same time, policy trade-offs between inflation, growth, and financial
stability are becoming increasingly difficult. The resilience of emerging markets to the global turmoil is being tested as external financing conditions tighten and policymakers face rising inflation.”
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