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Ghana News

IMF warns of vulnerabilities in nonbank financial sector and calls for appropriate guardrails and tools to manage stress

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The International Monetary Fund (IMF) has warned of pockets of financial vulnerability building up over years of low rates, compressed volatility, and ample liquidity, highlighting the importance of understanding and safeguarding a broad range of financial institutions beyond banks.

The IMF said that letting nonbank financial intermediaries have direct access to central bank liquidity could be necessary in times of stress, but erecting appropriate guardrails is paramount.

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Such intermediaries, including pension funds, insurers and hedge funds, account for almost half of global financial assets, up from about one-third prior to the 2008 global financial crisis.

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