ECONOMY: FINANCIAL STABILITY
Rising global financial risks
Slowing inflation, rapid private credit growth, cyber risks and decentralised finance all pose threats to the stability of the global financial system; coordinated regulatory strategies are essential for mitigation
capitalisation, leading to an increase in credit risks. The cyber resilience of the financial systems of G20 members needs to be strengthened by implementing coordinated regulatory and supervisory strategies. The reduction of these risks contributes to reducing economic uncertainty and promoting the food security, health and educational security of all G20 members. In the financial system, cryptocurrencies are among the most popular traded assets, but they are entirely deregulated and unsupervised. The benefits of cryptocurrencies, especially for developing and middle-income countries, mainly come from financial inclusion, reduced transaction costs and enhanced payments’ efficiency. The costs depend on competition and the illicit use of digital money. The vast popularity of crypto assets has pushed most central banks in G20 members to develop central bank digital currencies. CBDCs are digital counterparts to legal money and are managed by the national central bank, with or without the
T he risks to financial stability in the current global economy include the effects of slowing inflation, the massive growth of private credit and digital threats such as cyber risks, according to the International Monetary Fund. The inflationary pressures observed in the past few years are lessening, and most G20 central banks are expected to reduce interest rates by the end of 2024. Corporate private credit, especially in developing and emerging economies, has grown very rapidly with no strict regulation and with weak
Chiara Oldani, professor of monetary economics, University of Viterbo ‘La Tuscia’
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G20 BRAZIL: THE RIO SUMMIT — 2024
globalgovernanceproject.org
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