Over the past few years we have documented numerous warnings which the IMF and the Bank for International Settlements (BIS) have issued in regards to risks that exist to the stability of the global financial system. Most of the warnings come directly from IMF and BIS officials and publications. And it looks like we are not the only blog that thinks systemic risk is a serious topic to consider. The Yale School of Management has a blog on it and even offers a masters degree in the study of systemic risk.
Below is a list of links to these warnings to make it easier for readers to read and review. It is intended to be an information resource available to anyone who can use it. The links (in parentheses) allow you to go directly to the source link used for my blog article if you like.
Readers are encouraged to send us links to new articles like these if you see them so the list can be updated. This list contains a lot of information. A suggestion might be to bookmark this page and review the information over time.
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October 2014 - BIS Markets - Guy Debelle- Potential for Violent Reversal of Markets (direct link to source) (link to Debelle speech)
October 2014 IMF Direct Blog 3.8 Trillion in Bonds Could go Up in Smoke (direct link to source article)
December 2014 - BIS - Impact of Surging Dollar on Markets (direct link to FT source article)
December 2014 - BIS publication - Minimum Capital Requirements for Banks (direct link to source) (BIS report)
December 2014 - BIS publication - Minimum Capital Requirements for Banks (direct link to source) (BIS report)
December 2014 - BIS Quarterly Report - Impact of Dollar Surge on Markets (direct link to source article)
February 2015 - IMF Deputy Chief Zhu Min - Shadow Banking (direct link to source article) (WEF link)
March 2015 - Former IMF Peter Doyle - Don't expect any warning on new crisis (direct link to source)
April 2015 IMF Global Financial Stability Report - Liquidity Shock (direct link to source article) (IMF report)
May 2015 BIS Manager speech - Blindspots in the System, Need New "Rules of the Game" (direct link to source)
June 2015 IMF - (Jose Vinals) Central Banks may have to be Market Makers (direct link to source article) (direct link to comments - see Panel 4 video link and start at 45:58 minute mark)
June 2015 BIS - World is Defenseless in next Crisis (UK Telegrahph, no blog article) (BIS Annual Report)
June 2015 BIS - Jaime Caruana speech - The monetary system has a blind spot (pp 6-7)
July 2015 - IMF - Warns US the System is Still Vulnerable (CNN - no blog article)
July 2015 - IMF - Warns Pension Funds Could Pose Systemic Risk ( FT - no blog article)
July 2015 - IMF - Systemic Risk Oversight and Management - (lists various risks in the US)
August 2015 BIS - Monetary Policy Dilemmas for Emerging Markets (BIS workpaper)
Sept 2015 BIS - Warns on Impact of Fed Tightening BIS Quarterly Report (Q3 2015)
October 2015 IMF - Warns on Emerging Market Defaults IMF Financial Stability Report
January 2016 - New Serious Warnings from both former BIS and current IMF - Blog article
February 2016 - BIS Jamie Caurana - Oil Collapse could prick debt bubble - speech link - Blog article
March 2016 - BIS Claudio Borio - we need to abandon debt-fuelled growth model - slides - Blog article
March 2016 - BIS Quarterly Review - Confidence in Central Banks has been Faltering - Blog article
April 2016 - IMF Issues New Debt Warning - Blog article - Source article (Bloomberg)
June 2016 - BIS - Warning on Too Strong US Dollar - Blog article - Source speech link
August 2016 BIS Workpaper - Unconventional Monetary Policies "Dangerous"? - Source article (BIS)
October 2016 IMF Annual Report - Warns Banks - Source press conference
December 2016 BIS (Claudio Borio Q&A) - Risk of Historic Rupture in the System Still Exists - source
February 2017 (BIS) Jaime Caruana Speech - New Debt Warnings - source link
April 2017 - IIF (not IMF) Warns Global Debt Continues to Explode Higher - IIF source link
July 2017 - BIS is quoted as saying a "global crash" is coming, reports were in error as we explain here
December 2017 - IMF & Others State Concerns Over Debt
July 2018 - IMF Issues Warning Related to Global Trade Wars (but does not suggest it is a systemic risk)
Feb 2019 - Article by Former NY Fed Mike Silva on Potential Problem in the Next Financial Crisis
(Mike Silva Followup article)
June 2019 - IMF Warns Giant Tech firms could "present a unique systemic challenge to financial stability"
(related Facebook article)
Note: In mid 2019, no imminent crisis warnings have been issued, but a number of ongoing systemic risks are mentioned by both the IMF and the BIS. Former NY Fed Chief of Staff Mike Silva warns that the Fed may not be able to deal with the next big crisis in early 2019. The BIS warns that governments cannot continue to rely on easy monetary policy to sustain economic growth in its mid 2019 report. Both the IMF and the BIS issue warnings that the entry of giant tech firms (like Facebook) into finance could create some systemic risk.
Added notes:
A thank you to Bill Holter for mentioning this list in his recent article (Jim Sinclair runs it here)
Greg Hunter and Bill Holter talk about this warnings list in this interview
Appreciate Willem Middelkoop mentioning this list on his Twitter feed
Jim Rickards points out that these warnings have been issued for a long time now
Along those lines, the IMF has been talking about and studying this problem for a long time.
Below are some links to a 2009 in depth IMF report on Systemic Risks.
Chapter 1 - Stabilizing the Global Financial System
Chapter 2 - Assessing the Systemic Implications of Financial Linkages
Chapter 3 - Detecting Systemic Risk
A quote from the Conclusion Section of Chapter 3:
"Although every measure of systemic risk has limitations to some degree, and indeed all models are by nature simplifications of the complexity of the real world, this chapter discusses various tools that can be used to shed light on potential systemic events. Thus far, financial sector regulation and supervision have focused on the risk of failure of each financial institution in isolation. The analysis presented here suggests that regulators should take into account the risk of both individual and systemic failures."
In October 2014 the IMF released an internal study on how much its ability to provide early warning for a crisis had improved and what obstacles remained. You can see it here. The conclusions in the report (pp 30-32) listed areas that needed improvement.
Here is a January 2015 ECB report on the IMF's Surveillance of Europe - recommendations to the IMF for improvement start on page 24.
June 2015 BIS - Jaime Caruana speech - The monetary system has a blind spot (pp 6-7)
July 2015 - IMF - Warns US the System is Still Vulnerable (CNN - no blog article)
July 2015 - IMF - Warns Pension Funds Could Pose Systemic Risk ( FT - no blog article)
July 2015 - IMF - Systemic Risk Oversight and Management - (lists various risks in the US)
August 2015 BIS - Monetary Policy Dilemmas for Emerging Markets (BIS workpaper)
Sept 2015 BIS - Warns on Impact of Fed Tightening BIS Quarterly Report (Q3 2015)
October 2015 IMF - Warns on Emerging Market Defaults IMF Financial Stability Report
January 2016 - New Serious Warnings from both former BIS and current IMF - Blog article
February 2016 - BIS Jamie Caurana - Oil Collapse could prick debt bubble - speech link - Blog article
March 2016 - BIS Claudio Borio - we need to abandon debt-fuelled growth model - slides - Blog article
March 2016 - BIS Quarterly Review - Confidence in Central Banks has been Faltering - Blog article
April 2016 - IMF Issues New Debt Warning - Blog article - Source article (Bloomberg)
June 2016 - BIS - Warning on Too Strong US Dollar - Blog article - Source speech link
August 2016 BIS Workpaper - Unconventional Monetary Policies "Dangerous"? - Source article (BIS)
October 2016 IMF Annual Report - Warns Banks - Source press conference
December 2016 BIS (Claudio Borio Q&A) - Risk of Historic Rupture in the System Still Exists - source
February 2017 (BIS) Jaime Caruana Speech - New Debt Warnings - source link
April 2017 - IIF (not IMF) Warns Global Debt Continues to Explode Higher - IIF source link
July 2017 - BIS is quoted as saying a "global crash" is coming, reports were in error as we explain here
December 2017 - IMF & Others State Concerns Over Debt
July 2018 - IMF Issues Warning Related to Global Trade Wars (but does not suggest it is a systemic risk)
Feb 2019 - Article by Former NY Fed Mike Silva on Potential Problem in the Next Financial Crisis
(Mike Silva Followup article)
June 2019 - IMF Warns Giant Tech firms could "present a unique systemic challenge to financial stability"
(related Facebook article)
Note: In mid 2019, no imminent crisis warnings have been issued, but a number of ongoing systemic risks are mentioned by both the IMF and the BIS. Former NY Fed Chief of Staff Mike Silva warns that the Fed may not be able to deal with the next big crisis in early 2019. The BIS warns that governments cannot continue to rely on easy monetary policy to sustain economic growth in its mid 2019 report. Both the IMF and the BIS issue warnings that the entry of giant tech firms (like Facebook) into finance could create some systemic risk.
Added notes:
A thank you to Bill Holter for mentioning this list in his recent article (Jim Sinclair runs it here)
Greg Hunter and Bill Holter talk about this warnings list in this interview
Appreciate Willem Middelkoop mentioning this list on his Twitter feed
Jim Rickards points out that these warnings have been issued for a long time now
Along those lines, the IMF has been talking about and studying this problem for a long time.
Below are some links to a 2009 in depth IMF report on Systemic Risks.
Chapter 1 - Stabilizing the Global Financial System
Chapter 2 - Assessing the Systemic Implications of Financial Linkages
Chapter 3 - Detecting Systemic Risk
A quote from the Conclusion Section of Chapter 3:
"Although every measure of systemic risk has limitations to some degree, and indeed all models are by nature simplifications of the complexity of the real world, this chapter discusses various tools that can be used to shed light on potential systemic events. Thus far, financial sector regulation and supervision have focused on the risk of failure of each financial institution in isolation. The analysis presented here suggests that regulators should take into account the risk of both individual and systemic failures."
In October 2014 the IMF released an internal study on how much its ability to provide early warning for a crisis had improved and what obstacles remained. You can see it here. The conclusions in the report (pp 30-32) listed areas that needed improvement.
Here is a January 2015 ECB report on the IMF's Surveillance of Europe - recommendations to the IMF for improvement start on page 24.
Just a quick note. The response to the Bill Holter article citing this warnings list was incredible. Because so many thousands of people are visiting this page I went back and tried to make it more user friendly by adding a direct source link for the information used to write my original blog post. I do agree that providing direct source links is important. While they can found in my original blog articles listed above, the links to the right (in parentheses) should make it easier to go directly to source information if you want to. I apologize for not doing this before, but I did not realize the Bill Holter article was coming out so quickly and I had not really finished working with this page to add the extra links when he wrote the article. It's wonderful to have so many people find the blog so I wanted to try and make this page easier to work with if you are trying to verify the sources of the information.
ReplyDeleteThank you for taking time to look at this page. I hope it will be helpful to you in studying the various warnings. I will add that both the IMF and the BIS feel they are working on improvements to financial system stability and you can look at the links at the bottom of the page to see how they believe they are addressing the risks that they warn about listed above. If you have questions or concerns just drop me an email any time.
Another quick note to thank all the sites that have run this list now. It's more than I can keep up with, but all of them are appreciated. Silver Doctors ran the list here:
ReplyDeletehttp://www.silverdoctors.com/imf-and-bis-systemic-risk-warnings/#more-56395