Tony Chukwunyem 
Although the roll out of Covid-19 vaccines worldwide may be triggering expectations of an imminent end to the pandemic, monetary authorities should not rest on their oars, but should focus on safeguarding financial stability, the International Monetary Fund (IMF) has said.
The fund, which gave the advice in a newly published blog post obtained by New Telegraph yesterday, noted that although financial stability risks occasioned by the Covid-19 crisis have been curbed so far due to measures introduced by monetary and fiscal authorities, steps still need to be taken to tackle vulnerabilities exposed by the pandemic.
The fund stated: “These (vulnerabilities) include rising corporate debt, fragilities in the nonbank financial institutions sector, increasing sovereign debt, market access concerns for some developing economies, and declining profitability in some banking systems. “Policymakers need to use this time to safeguard financial stability by employing macroprudential measures (for example, stricter supervisory and macroprudential oversight, including targeted stress tests at banks and prudential tools for highly levered borrowers) and developing new tools as needed.
For example, policymakers are considering whether the macro- prudential framework for nonbank financial institutions may need to be strengthened to address weaknesses that became apparent during the March turmoil.”
It emphasised that “tackling vulnerabilities through these policies is crucial to avoid putting economic growth at risk and to prevent financial instability from disrupting the global economy.”
