IMF: Banks Need Overhaul to Resume Lending

The IMF's Financial Stability report highlights ongoing challenges in the banking sector six years after the global financial crisis. It notes that some banks, particularly in Europe, struggle to support economic growth due to insufficient profitability. The report discusses the uneven impact of low interest rates, with US corporate investment recovering while European investment remains sluggish. Additionally, it warns of rising liquidity risks and increased market concentration. A significant concern is that many large banks have a return on equity that fails to meet shareholder capital costs.

What concerns does the IMF raise about rising liquidity risks in the developed world?

What is the significance of the 80% assets at the biggest banks mentioned in the report?