Wednesday, May 30, 2018

North Korea News Note

Business Insider runs this article which, if true, may signal that some important change might really be underway inside North Korea. With the history associated with North Korea, we must take just about everything we see and hear with a grain of salt. However, we certainly hope this news is accurate and that it means North Korea may be ready to work with the world to make things better for everyone. A couple of excerpts are below.


"A video of North Korean leader Kim Jong Un crying about his country's terrible economy while surveying its coast has reportedly made the rounds in the country's leadership — and it could be a sign he's ready to cave in to President Donald Trump in negotiations."

In the alleged video, which Japan's Asahi Shinbum quoted a defector with contacts inside the country as describing, a narrator explains Kim is crying that he can't improve North Korea's economy.

The defector said the video surfaced in April and high ranking members of North Korea's ruling party viewed it, possibly in an official message from Kim to the party."   . . . .

Added comments: Our purpose here is not to try and get involved with the politics involved  in any of these geopolitical events around the world. Instead, we are trying to assess if any of these events (or a combination of events) might be able to impact the stability of the overall global financial and monetary system. Obviously, any armed conflict involving North Korea could create such instability so it is an important situation to monitor.

In this case, we simply hope this news is accurate and indicates a sincere desire on the part of all parties involved to work for lasting peace and prosperity for all of Korea. That certainly makes the world a safer place and a better place. If it were to happen, it takes war with North Korea off the table as a major systemic risk factor. Something we can all be happy about.

Sunday, May 27, 2018

Fitch Describes Emerging Markets as "Vulnerable" to Debt Load

News note:

Bloomberg runs this article  which states that Fitch is warning that emerging markets are vulnerable to debt that has grown now to over $19 Trillion. Just ten years ago the number was $5 Trillion. Below is an excerpt.


"Outstanding debt securities from developing nations have ballooned to $19 trillion from $5 trillion a decade earlier, the credit-rating company (Fitch Ratings) said in a report. Despite the development of local-currency bond markets, borrowers will be hobbled by higher external borrowing costs, a stronger dollar and slowdown of capital inflows, it said."

Friday, May 25, 2018

BIS: Identifying Oil Price Shocks and their Consquences

The Bank for International Settlements (BIS) has released a study that attempts to identify the impact of oil price shocks on the global energy market. Below I have pasted in the summary abstract of this study. You can read the full study here. Further below are a few added comments.


"This paper proposes a simple but comprehensive structural vector autoregressive (SVAR) model to examine the underlying factors of oil price dynamics. The distinguishing feature is to explicitly assess the role of expectations on future aggregate demand and oil supply in addition to the traditional realized aggregate demand and supply factors. Our empirical analysis shows that identified future demand and supply shocks explain about 30-35 percent of historical oil price fluctuations. In particular, future oil supply shocks are more than twice as important as realized and future demand shocks in accounting for oil price developments. The empirical result indicates that the influence of oil price shocks on global output varies according to the nature of each shock. We also show that the financial factors and the development of shale-oil technology are additional relevant sources of oil price fluctuations."
My added comments: Having worked in the oil and gas production industry my entire life (as an accountant), I have seen a lot of major ups and downs in oil and gas prices over the years. There is no doubt that the price of energy has a big impact on the global economy and pretty much affects almost everyone.

Predicting prices is not an easy task. There are many variables that come into play such as:

- basic supply and demand
- the cost of finding and producing reserves
- market expectations of future supply and demand
- unexpected geo political events that arise from time to time
- politics
- taxation policies

and more.

From the perspective of most oil producing companies that I am aware of, the hope is that prices stay high enough to maintain production, fund finding costs to replenish reserves as they are depleted, and generate enough profit margin to maintain the incentive to continue to search for new reserves. On the flip side, most companies really do not want to see prices get too high for too long because it puts a large burden on the overall economy and makes energy costs high for some who can barely afford it. 

For the long term, the general forecasts I have seen (assuming no major global crisis that craters global energy demand) project that the world will need as much oil and gas production as possible to meet expected future energy demands alongside the expansion of renewable energy sources. The growth in global demand (especially in developing nations) would almost certainly exceed the available oil and gas supplies sometime in the next 20 years so we will need other forms of energy to take on more the load over time.

For our purposes here, oil prices are just one other factor we should keep an eye on that can create systemic risk if they get too high or too low for too long a period of time. For now, a price range between $50 and $75 per bbl is probably in the "sweet spot" to maintain investment to continue exploration while hopefully keeping energy costs contained as best we can. Long term prices below $40 or above $100 need to be watched carefully for their potential for systemic risk.

Monday, May 21, 2018

Dr. Judy Shelton Calls on Trump to promote monetary system reform "linked in some way to gold"

Dr. Judy Shelton was an adviser to the Trump campaign back in 2016 and at one point was suggested as a possible appointee to the Federal Reserve. Instead, she has accepted the position of US Executive Director for the European Bank for Reconstruction and Development. 

Dr. Shelton has long been an advocate for monetary system reform based on linking it in some way to gold, but perhaps in a more modern way. She repeats this call in a new paper published in the Spring edition of the Cato Journal. Below are a few excerpts. You can read the full paper here.


"How often do we hear references to the notion that we live in a rules-based global trading system? Addressing the World Economic Forum at Davos in January 2017, British Prime Minister Theresa May praised liberalism, free trade, and globalization as “the forces that underpin the rules-based international system that is key to our global prosperity and security” (Martin 2017). Chinese President Xi Jinping likewise extolled the virtues of a rules-based economic order at Davos, winning widespread praise for defending free trade and globalization (Fidler, Chen, and Wei 2017). But could someone please explain: 

What exactly are those rules?  . . . . ."

. . . . .

"Today there are compelling reasons—political, economic, and strategic—for President Trump to initiate the establishment of a new international monetary system."

. . . . .

"The new approach that emerged in the vacuum left by the dissolution of Bretton Woods was to have no international monetary system—that is, no rules or coherent mechanism for maintaining exchange-rate stability among national currencies."

. . . . .

"Just as the United States rose to the challenge of providing inspiration to desperate nations (at Bretton Woods) with a promise to establish stable and trustworthy monetary rules to undergird international commerce in compliance with free trade principles, the needed initiative falls once again to America. And just as then, the advantages of a sound money approach to ensure a level playing field that maximizes the rewards from true competition—by preventing currency manipulation through government intervention—will serve our own best interests."

. . . . .

"If the United States does nothing to restore a rules-based approach to international monetary relations, our values come into question. We lose credibility by failing to challenge an international monetary anti-system that condones cheating by governments and central banks. We acquiesce to the fiction that enforceable rules exist to ensure against currency manipulation—even as we complain about trade imbalances contrived through exchange-rate targeting."

. . . . .

"President Trump’s economic imperative now is to initiate reform both at the Federal Reserve and in conjunction with the international community to redefine monetary relations."

. . . . .

"What’s needed is a comprehensive approach for linking the money supply to increases in productive output—the restoration of sound money principles for economic growth. It’s time to reassert the primary functions of money as (1) a medium of exchange, (2) a unit of account, and (3) a store of value."

My added comments: When President Trump was first elected and Dr. Shelton was mentionned as a potential appointee to the Federal Reserve, it seemed as though Trump might have some interest in a return to gold in the monetary system. As time passed, it seemed as though nothing along those lines was in his mind.

Now we have Dr. Shelton once again calling on President Trump to think about monetary system reform "linked in some way to gold" (see page 387). This time she is speaking as a voice working inside the Administration. So I felt this paper should be featured to make readers aware of this. 

As I follow this situation over time, it feels like that I see a number of proposals for monetary system reform out there sort of competing for attention in the event that something comes along to disrupt the current system. So my goal is to make readers aware of the serious proposals I see out there that could be put forward at some point in the future. I'll add the link to this paper to the page of monetary system reform ideas that I keep archived here on the blog.

Friday, May 18, 2018

BIS May Newsletter - How Technology is Impacting the Nature of Money

Below I have pasted in the monthly email newsletter I get from the Bank for International Settlements. This month a video with BIS General Manager Agustin Carstens on the impact of technology on money and central banks is featured. The video is a panel discussion on central bank digital currencies held at the Brookings Institution. Here is link to the text of the panel discussion.


May 2018

The market risk framework: 25 years in the making

Basel Committee Secretary General William Coen outlines the steps needed to finalise the Basel III market risk framework.

International bank lending gains momentum

BIS international banking statistics show that banks’ cross-border claims rose by $123 billion in the course of Q4 2017, led by intragroup activity.

Stress testing of central counterparties

New framework helps authorities design and implement macroprudential stress tests for central counterparties.

How is technology affecting the nature of money and the role of central banks?

General Manager Agustín Carstens argues that technology cannot substitute for central banks when it comes to issuing currencies.

Dollar credit to emerging markets jumps

BIS global liquidity indicators show that US dollar-denominated bonds issued by emerging market borrowers grew a record 22% in the year to end-2017.

Debt securities drove growth in US dollar credit to EMEs

Sunday, May 13, 2018

Warren Coats - Free Banking in the Digital Age

Discussion of digital currencies is all the rage these days. Central banks are studying the idea of issuing central bank digital currencies. The former head of the SDR Division at the IMF (Dr. Warren Coats) has followed all this and offers his thoughts on what might be a viable option for the future in this new blog post. Below are a couple of excerpts.


Dr. Coats

"A number of central banks are considering issuing digital currency either in place of the paper currency they now issue or in parallel with it.  The advantages of central bank digital currency (CBDC) over paper currency for the issuer is the much lower cost of supplying and maintaining the currency (printing, storing, transporting, safekeeping and replacing old and damaged notes). For the users, there are the benefits of much greater speed and lower cost of making payments of currency across distances.  The use of paper currency (cash) in economies with proliferating electronic means of payment (Visa, PayPal, Zella, popmoney, etc.) has been and will continue to fall.  In addition, digital currencies can and do extend digital payment services to the unbanked.  This note explores some of the policy issues raised by CBDC, by which I mean digital claims on the currency issued by the official monetary authority, whether directly or indirectly."

. . . .  

"Should central bank digital currency be provided retail or wholesale?  A central bank could issue its digital currency to anyone who signed up (registered, i.e. opened an account directly with the central bank). As all uses of this digital currency would be between participants in the system, transfer would be simple and instantaneous.  It would be essentially the same as logging into your current bank account and transferring money to another depositor in the same bank.

In addition to the above advantages of speed and simplicity, this central bank retail approach carries the burden of an enormous expansion of central bank staff to interface with the general public in establishing and managing this new digital currency. Equally troublesome is the likelihood, if not certainty of a “digital run” from bank deposits to the central bank’s digital currency.  . . . . .

. . . .


My conclusion from the above considerations is that . . . . .

Added note: Regarding this question raised in the article:
Should central bank digital currency be provided retail or wholesale?
Retail would mean allowing individual private citizens to open a direct account with their central bank to hold the central bank digital currency. Wholesale would mean only large financial institutions would be able to have such an account.

Friday, May 11, 2018

Forbes Article: US Fed Paper Says Central Bank Cryptocurrencies are Missing the Point

Here is an interesting article that recently appeared in Forbes that notes that the US Federal Reserve is far from sold on the idea of central bank digital currencies based on blockchain technology. Below is an excerpt.


. . . . 

"The reason these central banks are keen to adopt Bitcoin-like technology is to improve existing systems of payment (and for good reason—  but the Fed's Reserve Bank of St Louis recent paper says this misses the point of cryptocurrencies.

The Fed's report authors, Aleksander Berentsen and Fabian Schar, write:  . . . . ."

Added note: Here is link to the recent blog post by the St. Louis Fed on this topic.

Also, Bloomberg runs this article which points out that central banks around the world are far from in agreement on central bank digital currencies and that no major central bank in a developed nation seems close to moving in that direction for now. The Bloomberg article opens with this statement:

"The joke doing the rounds at last week’s spring meetings of the International Monetary Fund and the World Bank in Washington was that central banks are looking into cryptocurrencies so that their governors have something to say when they go to conferences and are asked about Bitcoin."

Meanwhile, some involved in the process do think some central banks might try a "wholesale" version of a central bank digital currency sometime in 2018. Wholesale would mean that individual citizens could not open central bank accounts and hold the currency directly with the central bank. The concern is that in a financial crisis people would likely move all their funds into their central bank account creating a run on private bank accounts. Some have discussed the idea of limiting the amount anyone could hold in a central bank account as another way to deal with the issue.

Additional note: Dr. Warren Coats sent me this link to a Reuters article that notes that even the disbtributed ledger technology is far from proving worth implementing at central banks. Here is the last paragraph from that article:

"Other technologies are also being explored to enable instantaneous settlements. The European Central Bank is planning to launch a new settlement system in November which it says will allow transactions to be conducted in real-time, but does not use distributive ledger technology."

One global payments system expert I have been hearing from for years told me some time ago that blockchain (or DLT) is not any real "breakthrough" technology in his view and as time goes by, his comments seem more and more in tune with what is happening as people try to make this technology work in the real world. Even Facebook has expressed frustration with the current state of blockchain technology as they look into their own cryptocurrency. Here is the conclusion of their blockchain guru:

"During an interview at a conference in February, Marcus said Facebook didn’t have plans to integrate cryptocurrency into its apps anytime soon.

"Payments using crypto right now is just very expensive, super slow, so the various communities running the different blockchains and the different assets need to fix all the issues, and then when we get there someday, maybe we'll do something,” Marcus said."

Tuesday, May 8, 2018

Trying to Assess the US Political Divide -- Impact on Stability

Readers here know that this blog tries to completely avoid any kind of political agenda because the purpose of this blog is to try and assess events to determine what impact they may have on the stability of the present monetary system and if they may create conditions that could lead to major change from the status quo (good or bad). 

However, it is obvious that the political environment can contribute to instability so we have to try and assess that as best we can. Below is an attempt to do that based on current conditions.

For some time now, it has been clear that the US population (and even the global population) is deeply divided on major political issues. While this is not anything new in either US or World history, the intensity of the divide and the lack of civility between those on the extremes at each end of the fight is the worst I have seen during my lifetime. 

The election of President Trump has done nothing to change this situation as far as I can determine. Those who literally hate President Trump are clearly determined to get rid of him one way or another and the tactics used don't appear to matter. For his part, President Trump is living up to his promise to fight his enemies the only way he has ever known. He has no qualms about using any tactics he thinks will work in his favor. His supporters will back him no matter what happens.

This potentially explosive conflict is always out there daily as the two sides engage in bitter attacks back and forth. One expert I talk to from time to time who has years of experience working with US intelligence agencies told me we currently witnessing "a slow motion civil war" unfolding in the US politically. 

The incredible thing to me (at least so far) is that this ongoing "civil war" has somehow not had much negative impact on financial stability as markets seem to just ignore the situation and life on "main street" just continues on fairly normally for most people.

We have constant news articles appearing suggesting that either the President or some of his family members could face indictments. On the flip side, we now have legal investigations into those who are leading the legal investigation into the President (or have led it in the past). Some members of the Obama Administration are said to be at risk for potential indictments over all this with recent referrals by the Justice Department. 

Let's let all that sink in. We are at a point in time where all kinds of key people (both pro and anti President Trump) are said to be at risk of felony indictments and the markets just yawn at it all as if nothing were happening.

We must ask why this is the case? I really don't know all the answers, but we have to assume that the markets do not truly believe anyone significant (in the view of the markets) is going to face legal charges any time soon or they would surely be reacting to that. So far they seem to just view all this as a political stalemate (no one is winning the "civil war"). President Trump is continuing to move forward with parts of his agenda despite all the obstacles in his way even as some of his agenda items get sidetracked. But the country still functions fairly normally for the most part on a day to day basis.

As for the average person out here like myself who follows the news, but is mostly just trying to make a living and provide for a family, I don't see any significant interest in all this political battling. I think most people just write it off as politics as usual and are not seriously engaged unless something happens that directly impacts their daily lives. Otherwise, they just figure there is not much they can do about whatever happens except vote when the time comes to do that.

So I think as long as the political fighting continues as a stalemate and no significant major political players are indicted, most people will just mostly ignore all this and get on with their lives. The stock market seems OK and real estate values are OK so far. (see my added comments below for my best guess at trying to assess where all this may be going from a legal standpoint).

Until something happens that suggests markets are truly upset by all this fighting, this political divide is not really impacting things in a way that might create instability or lead to major changes as best I can tell. I suspect that if that changes, we will all know it pretty quickly because the markets will tell us something is seriously wrong and we will easily see that stability has been shaken. 

I can only suggest readers just monitor news events and follow market reactions to those events. If you see any or all of the following:

- steep stock market drops (far beyond a normal correction)
- sharply rising gold prices
- a sharply falling US dollar index price
- a major financial institution or institutions go under

it will be time to pay very close attention and watch events very carefully. 

For now, the political stalemate seems to be holding and not having too much impact on financial stability or markets. There are no indications that major monetary system change is on the horizon and I continue to believe it will take a new major financial crisis (and therefore systemic instability) to alter the landscape. 
Added note: This recent article appearing on seems to make several of the same points noted above. 

My added comments: Here is my best guess at trying assess where all this is headed from a legal standpoint based on listening to the experts involved:

It is my understanding that most agree that a President may not be indicted while in office, but there is some precedent for a President being subpoenaed before a grand jury. However, no President has ever appeared before a grand jury as I understand it. (President Clinton appeared in a video interview I believe).

The President's attorney stated that unless the Special Prosecutor agrees to conditions that are acceptable to the President's lawyers, he will not be allowed to be interviewed. If no interview takes place, the Special Prosecutor will then have to decide if he wants to take another step to ramp all this up even more and try to subpoena the President to appear before a grand jury.

It is my understanding the President's lawyers will then fight the subpoena in court all the way to the Supreme Court which would probably take months or even years to play out. Meanwhile, we would expect that this action would ramp up the intensity of this whole fight to the point where both sides were attacking constantly in the media and that the media will only feed the fight on both sides. 

We can expect the public to become enraged by all this if the day to day operations of the government are visibly impacted in ways they feel in their lives or if the spillover from it impacted the markets and the US economy (a risk that I think increases the longer this goes on).

Regardless of whether the President ever appears before a grand jury or if he is ever charged with any crime (even years from now), we can expect that both sides of this fight will use every means at their disposal to try and influence the voting public leading up the the November mid term elections. In fact, I believe that much of what we are seeing now is posturing to try and influence voters since most everyone knows the President will not be indicted while in office and is not likely to appear before a grand jury before November (if ever). 

If the Democrats were to win the House of Representatives, many assume they would immediately begin impeachment proceedings. Republicans, of course, want to prevent that. If impeachment proceedings are started, we can expect this to go to a whole new level of intensity.

To say that all this has the potential to be explosively destructive to the country both in terms of political ill will (that will probably go on for years no matter who is in office) and to severe disruption to financial markets would probably be an understatement. One expert with years of experience working with our intelligence agencies (who I view as non partisan politically) has told me we would be watching a "slow motion civil war" take place. I doubt the public will sit still quietly and just watch the country torn apart without significant anger if we get to that point.

Unless something happens to tamp back down the intensity of this situation and resolve it without creating a constitutional crisis involving the President, we will have to move this whole problem to the top of our list of events to watch carefully that could potentially trigger a major financial crisis. It is impossible to determine at this time which way this is going to go as both sides are ramping up pressure with no signs that either plans to back down.

The collateral damage from such a "civil war" to the country and regular citizens not involved in all this (except as possible victims) could be enormous. Hopefully, something will change the current course of events and a constitutional crisis will be avoided. The markets have not indicated they take this seriously yet, but that could change eventually.

Sunday, May 6, 2018

Saga Foundation to Issue New Cryptocurrency with the SDR as the "Unit of Reserve"

A thank you to a blog reader who alerted me to this news article. It talks about a another new cryptocurrency to be issued by the Saga Foundation that is tied to the SDR basket of currencies and also would attempt to expand and contract based on economic activity. Below is an excerpt from the article and further below some excerpts from the Saga Foundation web site.


"Saga is being developed by The Saga Foundation, a Swiss non-profit created last year that is dedicated to developing new technologies in open and decentralized software. The advisory board includes Jacob Frenkel, the former Governor of the Bank of Israel and chairman of JPMorgan Chase International; economics Nobel laureate Myron Scholes, known for creating the Black-Scholes formula, the most well-known model for pricing options and derivatives; Dan Galai, a co-developer of VIX, the leading measure of financial market volatility; and Leo Melamed, the chairman emeritus of CME Group and pioneer in financial futures. Needless to say, the board knows a thing or two about how markets work."


From the web site:


Saga: An Asset-Backed Currency

"By allowing participants to both buy and sell SGA, Saga’s smart contract acts as a market maker.
To buy SGA tokens, participants send funds to Saga’s Smart Contract, where they are kept as part of the variable reserve of conventional currencies, hosted by reputable banks.
The primary purpose of Saga’s reserve is to ensure participants can sell SGA; the contract will always offer to buy SGA, drawing on funds from the reserve.
The SGA token will be available for purchase starting Q4 2018."
. . . . .

Restrained Price Volatility

"SGA’s price fluctuates according to market demand. However, price volatility is moderated by the interplay between the money supply and the reserve. By buying and selling SGA, Saga’s smart contract adjusts the money supply to meet market demand. Therefore, the reserve acts as a buffer, limiting the impact of market fluctuations.
In practice, when the economy expands, the contract increases SGA supply, slowing price appreciation. Conversely, when Saga’s economy shrinks, the contract reduces the money supply, thereby curbing any large drops in SGA price."
. . . . 

from the Q&A section of the web site:

How will Saga manage its reserves?

  • Saga uses the services of well-known banks to hold its reserves. The precise deployment of funds is determined by Saga’s Smart Contract. An algorithm controls the release and return of funds as required for the health of the overall Saga ecosystem.
  • We selected the SDR - an International Monetary Fund basket of fiat currencies - as our unit of reserve. This reduces the dependence of Saga on the value of any single currency, however safe it may appear today.

Added comments: This proposal is an example of the kind of thing economists discuss and debate when looking at ideas to improve the monetary system. The goal is to end up with a system where the currency retains a stable value long term and can function to meet the needs of society in the best way possible. The quest for that kind of system goes on all the time behind the scenes with a lot of ideas being discussed and debated along the way. However, we don't see any signs that major change is on the near term horizon at this time.

Thursday, May 3, 2018

Project Syndicate Article: From Dollar to "e-SDR"

Whenever I see a proposal related to a broader use for the SDR as a global currency, I try to mention it here since this blog attempts to follow ideas and proposals for monetary system change. This new article appearing on Project Syndicate looks like another proposal to try and find an expanded role globally for the SDR. Below are a couple of excerpts and then an added comment.


. . . . .

Of course, the Triffin dilemma can be avoided, and America’s outsize influence over the monetary system reduced. All that is needed is a major reserve currency that is not issued by a national authority. Gold was once supposed to fill this role, but it couldn’t meet demand for global liquidity and a store of value.

A better option is the IMF’s Special Drawing Right (SDR), which the second amendment of the body’s Articles of Agreement asserts should become the world’s “principle reserve asset.” 

. . . . .

My added comment: This article talks about not only a broader use for the SDR but also the idea of incorporating the blockchain to get to what they refer to as an "e-SDR".

While I try to note any proposals I see along these lines, I should also note that I am not aware of any official effort by the IMF to move towards this proposal. In fact, in a recent report issued by the IMF on the role of the SDR that we covered here, they seem to suggest that there is little interest in trying to expand the role of the SDR within the IMF at this time.

I did notice that this article in Project Syndicate talked about the potential for instability and crisis due to current world events and suggested that this could create the need for the kind of new global reserve currency they propose ("not issued by a national authority"). 

This is what we have been reporting here from some time. Under crisis conditions, the potential for major monetary system change would likely go up and we would probably see a lot of competing proposals emerge. Getting consensus on one proposal would appear to be quite a difficult task based on the research I have done on this over the past four years.

While I see all kinds of proposals out there related to the SDR, at this time there is nothing that I am aware to suggest anything like this is on the near term horizon absent a new major global financial crisis. But I try to alert readers of anything I see proposed.

Tuesday, May 1, 2018

IMF - Spring Meeting Communique

The IMF recently completed their annual spring meeting. There was not much activity in terms of anything that would lead to major monetary system reform as far as I can tell. Below is a portion of the concluding section of the report. You can read the full report here.


IMF resources and governance
"We reaffirm our commitment to a strong, quota-based, and adequately resourced IMF to preserve its role at the center of the GFSN. We are committed to concluding the 15th General Review of Quotas and agreeing on a new quota formula as a basis for a realignment of quota shares to result in increased shares for dynamic economies in line with their relative positions in the world economy and hence likely in the share of emerging market and developing countries as a whole, while protecting the voice and representation of the poorest members. We call on the Executive Board to work expeditiously toward the completion of the 15th General Review of Quotas in line with the above goals by the Spring Meetings of 2019 and no later than the Annual Meetings of 2019. We note the progress report to the Board of Governors and look forward to further progress by the time of our next meeting. We welcome the progress made in securing commitments under the 2016 Bilateral Borrowing Agreements. We call for full implementation of the 2010 governance reforms."
My added comments: The IMF has continued to issue warnings regarding total global debt and the risk it poses to global financial stability. They mention it again in this report. Earlier we covered the new IMF report on an expanded role for the SDR.
While no immediate threats to global financial stability are mentioned, we all understand that the very high debt to GDP ratios that exist around the world (including in the US) remain an ongoing risk for financial stability.