Global Financial Stability Tested by Higher Inflation and Interest Rates
IMF Podcasts
The Risks of Geopolitical Tension to the Global Economy
The report also looks at how geopolitical tensions and an increasingly fragmented world are posing additional risks to the financial system. One standard deviation increased in geopolitical tension between investing and receiving country could reduce bilateral cross-border portfolio bank allocation of about 15%. That's not a small number. Could also cause sudden reversal cross-border capital flows, and this effect would be more pronounced for emerging markets and developing economies.
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