IMF warns on share price risks

By DAILY MAIL REPORTER
Updated:

 

THE International Monetary Fund warned that the world economy faces 'considerable downside risks in the immediate future'. In its quarterly Global Financial Stability Report, it said the main dangers include a further slump in share prices, and 'in a worst-case scenario, panic selling'.

The IMF also identified as risk factors a slowdown in overseas investment in the US and a further weakening of bank and insurance-company balance sheets.

Director Gerd Hausler said 'financial conservatism' among lenders and other companies loath to take risks may delay the recovery. He said the prospect of war with Iraq meant 'additional stress to markets' but the impact is impossible to forecast.

The IMF still believes stability will be maintained in the financial systems.

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