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IMF Reccomends Stronger Measures to Fight the Global Financial Crisis

imf-building-2The International Monetary Fund (IMF) has recently published a comprehensive report called “Global Financial Stability Report – Responding to the Financial Crisis and Measuring the Systemic Risk.”. The IMF paper covers the history of the recent global financial crisis, as well as the measures taken by the governments and the companies to fight against it.

The report analyzes why the financial institutions have all been hit so hard by the current financial crisis, from the pension funds to the life insurance companies. These institutions were impacted despite the fact that most of them took preventive measures to manage potential surges in the risks of their assets. The report also underlines that there is a strong retrenchment from foreign markets, which outpaces strongly the overall de-leveraging process. The sharp decline of the cross border funding actuall created the crisis in the emerging markets, whilst the re-financing needs of those markets are still very large (estimated by the IMF at $1.8 trillion in 2009). Read More »IMF Reccomends Stronger Measures to Fight the Global Financial Crisis

Will Further Interest Rates Reductions Boost The Economy?

Well, our survey has different views included, as usually. The answers tend to be pretty structured though, so let’s see the results.

The theory, as previously explained by doitinvest.com in a previous investing blog, says that the interest rate cut executed by the FED should boost the US economy. By reducing the refference interest rate, FED actually reduces the borrowing costs of the US banks. This is because the banks attract an important portion of their cash through loans from FED at the official interest rates. obviously, the lower the refference rate is, the lower the costs for the banks, which in turn are encouraged to lend money at smaller costs. The ultimate beneficiaries in this lending chain are the final consumers/companies, which should benefit from borrowing facilities available at lower costs.Read More »Will Further Interest Rates Reductions Boost The Economy?