The head of International Monetary Fund (IMF) makes it clear that this new asset is not yet a threat to financial system, because its penetration is very limited. But that does not prevent for regulators to be vigilant and anticipates that traditional financial institutions will have to face changes in ir business models. It will be a challenge even for central banks, who might encounter problems in future to act as lenders of last resort.More information
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"It is inevitable that many do not survive process of creative destruction," he says, citing more than 1,600 criptomonedas in circulation. "The vertiginous twists of criptoactivos like Bitcoin invite you to make a match with fever of tulips that swept Holland in 17th century and recent dotcom bubble," adds Lagarde.
However, Managing Director of IMF is a firm believer in technology on which se new assets are supported, so she believes that authorities must work to create a regulatory framework that minimizes risks and differentiates between threats Real and fears it arouses. "Our preliminary assessment is that given its small presence and its limited links with rest of financial sector, cryptographic assets are not an immediate danger," says Lagarde in article published by institution referring to Implications of virtual currencies for financial stability.
The benefits of Criptomonedas, he insists, are evident. They will streamline and lower cost of transactions, make payment system more efficient and allow, at same time, technology that uses base can be used to protect confidentiality of data. But it also believes it important that this transformation into a more diffuse and decentralized system is done in a balanced way.
The technology that supports virtual currencies like Bitcoin will be one of great stars of a general debate in which world economy will be analyzed. The general view is optimistic. America grows to full employment, economic activity gains strength across Europe, and prospects for Asia are favorable. But re are many concerns, for protectionist escalation, geopolitical uncertainty, debt, and social inequality.
In hope that IMF will update its growth and inflation projections this Tuesday, global economy is expected to maintain a growth rate of 20107 this year, which approached a great deal of 4%. But Lagarde's most immediate concern is at this moment of trade shock that US and China wage. The monetary Fund is afraid that this clash will trigger a protectionist backlash that spreads throughout world.Debt and growth
To anxiety generated by IMF, Donald Trump's economic nationalism is added to or risk factors, such as rising interest rates or increasing debt by fiscal stimulus. The analysis of Fund reveals that global indebtedness reached 164 trillion dollars, 40% more than in 2007. More than half of that increase comes from China. It was economy's strong leverage that triggered last crisis.
The IMF, in fact, believes that recovery remains fragile and incomplete. Largely because economic activity was supported over past decade in a generously lax monetary policy. If financial conditions are curtailed, vulnerability will be greater so that companies and consumers can repay what y owe. The second point of fragility sees it in economic and social inequality that drags on from Great Recession.