Risk Taking, Liquidity, And Shadow Banking.pdf

The IMF's Global Financial Stability Report (GFSR) of October 2014, titled "Risk Taking, Liquidity, and Shadow Banking: Curbing Excess while Promoting Growth," explores three key themes:

1. Improving the Balance between Financial and Economic Risk Taking:
- The report examines whether economic and financial risk taking is balanced globally.
- It discusses the transition of global banks, market liquidity risks, and provides recommendations to improve the balance between financial and economic risk taking.

2. Shadow Banking around the Globe:
- The report defines and measures shadow banking, assesses its growth and risks, and suggests the role of regulation and oversight in managing these risks.

3. Risk Taking by Banks: The Role of Governance and Executive Pay:
- The report analyzes the impact of bank governance and executive compensation on risk taking, discussing trends in regulation and providing policy recommendations.

The GFSR is a semiannual survey by IMF staff, drawing out financial implications of economic issues highlighted in the IMF's World Economic Outlook. It was prepared by IMF staff and benefited from comments and suggestions from Executive Directors. The views expressed are those of IMF staff and do not necessarily represent the views of IMF Executive Directors or their national authorities.