Transcript of April 2021 Global Financial Stability Report Press Conference

April 6, 2021

Ms. Elnagar:

Good morning and welcome to the press briefing of the Global Financial
Stability Report. I am Randa Elnagar of the IMF’s Communications
Department. Let me start by introducing our panelists here. We have with
us, from the IMF’s Monetary and Capital Markets Department, Tobias Adrian,
Financial Counsellor and Director; Fabio Natalucci, Deputy Director; and
Evan Papageorgiou, Deputy Division Chief.

Tobias will give some opening remarks, and then we will take your questions
through the Media Briefing Center and on WebEx. Tobias, please go ahead

Mr. Adrian:

Ladies and gentlemen, thank you for joining us as we launch the new edition
of this year’s Global Financial Stability Report. The global economy is
beginning to emerge from the economic shock caused by the COVID‑19 virus.
The economy has benefited from extraordinary policy measures that have
eased financial conditions, preventing a deeper economic downturn. But
those actions may have unintended consequences. Valuations for risk assets
have become stretched. Financial vulnerabilities have intensified.
Continuing policy support remains necessary, but a range of policy measures
are needed to address vulnerabilities and to protect economic recovery.

We see three priorities: First, addressing corporate sector vulnerabilities
and repairing balance sheets is a priority. Second, tightening some
macroprudential tools in advanced economies is important to safeguard
financial stability and to enhance supervision and regulation of nonbank
financial institutions. Third, rebuilding buffers in emerging markets is a
policy priority to prepare for a potential repricing of risk and the
reversal of capital flows.

Central bankers have proven to be highly skillful during this past year as
they successfully engineered the financial rescue. In the year ahead, the
creativity is likely to be severely tested again, as they confront the
challenge of guiding their economies through asynchronous recoveries,
stretched market valuations, and strained social divisions.