The paper proposes a framework for examining the process of financial market development. The framework, consistent with the functional view of financial system design, is anchored in studying the incentives facing the key players in financial markets-borrowers, lenders, liquidity providers, and...

This Occasional Paper provides an overview of the main challenges facing Hong Kong SAR as it continues to become more closely integrated with the mainland of China. Section I provides an overview of recent macroeconomic developments and the main policy issues in Hong Kong SAR. Section II...

This paper questions the view that leverage should have forewarned us of the global financial crisis of 2007-09, pointing to several gearing indicators that were neither useful portents of the onset of the crisis nor of its ferocity. Instead it shows, first, that the use of ill-suited collateral...

The use of collateral has become one of the most widespread risk mitigation techniques. While it brings stabilizing effects to the individual lender we argue that it may exacerbate systemic risk through margin call activation. We show how a liquidity shock to the cash lender may propagate as a...

The report focuses on the role played by financial market infrastructures (FMIs) in maintaining and promoting financial stability in Japan. FMIs are important tools that contribute to the Japanese financial sector, especially in the domain of domestic financial stability. The oversight and...

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

The U.S. economy continues to recover at a modest pace, in line with international experience following severe financial crises. The key priority for fiscal policy is to stabilize the debt ratio and gradually reduce it. The fiscal framework should include an endorsement of the main medium-term...

This Selected Issues paper for the Kingdom of the Netherlands reports the Antillean economy lacks natural resources and is open and undiversified, relying mainly on exports of services such as tourism, international financial services, shipping, and oil refining. Exports and domestic consumer...