Financial stability under threat from lack of safe assets, IMF warns

[alp227]

Last edited Wed Apr 11, 2012, 04:25 PM - Edit history (1)

Source: The Guardian

The International Monetary Fund has warned that the "scramble" for a diminishing pool of safe assets poses a fresh risk to global financial stability.

With demand for rock-solid investments on the increase, the Washington-based IMF said a lack of supply could lead to "more short-term volatility jumps, herding behaviour and runs on sovereign debt."

The Fund predicted that the drop in the number of countries whose sovereign debt was considered safe could remove $9tn (£5.6bn) from the supply of safe assets by 2016, roughly 16% of the total. "Safe asset demand is expanding at the same time that the universe of what is considered safe is shrinking," it said.

Read more: http://www.guardian.co.uk/business/2012/apr/11/imf-safe-assets-threatens-financial-system

[DCKit]

1. IMF: "Mission Accomplished" nt

[bemildred]

2. The true reason we finance our government with debt:

Government debt is the safest place to park your money. But with no debt, no safe place to park your money, and less profits for the bankers too, since they will no longer collect all those "fees".

[Dont call me Shirley]

3. IMF: The real global terrorists.