Global debt has topped $250 trillion—320% of GDP; emerging market debt hits a new record of $71.4 trillion (220% of GDP); With limited room for further monetary easing, debt service costs will be an increasing constraint on fiscal policy; Climate change is driving significant reallocation in investor portfolios; high-debt countries will have a much harder time coming up with funding to address climate risks; USD hovering at record highs despite Fed rate cuts this year: persistent growth in demand for U.S. liquidity as dollar debt across EM and mature markets (ex-U.S.) hits record highs. Non-U.S. banks are increasingly reliant on USD funding.
Global debt surged by $7.5 trillion in H1 2019, hitting a new record of over $250 trillion. With no sign of a slowdown, we expect the global debt load to exceed $255 trillion in 2019—largely driven by the U.S. and China.
IIF President and CEO, Tim Adams, delivers scene-setting remarks to the 26th Annual IAIS Conference in Abu Dhabi, UAE. Speech as prepared for delivery.
This IIF staff paper evaluates the benefits of cross-border banking, with a focus on its implications for the macroeconomy and financial stability. It also includes policy proposals to reduce market fragmentation and maximize the net benefits of cross-border banking.
Huw van Steenis visits FRT to discuss the wide-ranging Future of Finance report that he authored for the Bank of England.
Weak growth has led to deteriorating debt dynamics in recent years. Falling business and consumer confidence do not point to a recovery. External imbalances remain despite weak activity and depreciation. Interest payments to non-residents have risen sharply due to high debt. The Rand is vulnerable to shifts in market sentiment and portfolio flows.
We expect non-oil growth to accelerate to 3.0% as private sector confidence improves and the monetary stance eases. However, overall growth will likely drop to 0.5%, dragged down by a significant cut in crude oil production.