Reuters, WASHINGTONThe financial sector should take rapid steps to address record or near-record inequality levels within countries that new research shows could be a harbinger of a new financial crisis, IMF managing director Kristalina Georgieva said on Friday. A report by IMF staff showed that expanding financial services to more low-income households, women and small businesses could serve as a powerful lever in creating a more inclusive society, but the increasing complexity of the financial sector often wound up benefiting mainly wealthy people. The IMF would apply the lessons of the new research to its assessment and surveillance of financial sector stability, while focusing on bolstered financial literacy among less “sophisticated” populations, she said. However, the financial sector also had a key role to play, she said, citing research by IMF staff that showed a 2 to 3 percentage point difference in longer-term GDP growth between financially inclusive countries and their less inclusive peers. Georgieva said the IMF had previously estimated that global trade tensions would shave 0.8 percent, or US$700 billion, off international economic growth.

Source: Taipei Times January 19, 2020 15:56 UTC