It said Europe needs to improve credit to viable enterprises. The report noted that many policymakers see weak credit growth generally in the global economy as a primary reason behind the slow economic recovery.
Developing countries saw a larger than normal surge in bond investments over the past five years, said Vinals. And they are already seeing significant capital flows out as interest rates rise in the U.S. and attract investment. Highlighting one risk to global financial stability, these outflows could increase significantly along with volatility.
Financial authorities may need to intervene to ensure the process is smooth, the IMF report said.
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