Why IMF global financial stability report should be taken with pinch of salt

Decade on from its less than prescient April 2006 report, Fund's view remains unbalanced - this time with too many false alarms

When I asked Google to find the text of the International Monetary Fund's Global Financial Stability Report for April 2006, it helpfully questioned whether I was looking for the April 2016 version instead. I am sure the IMF would never seek to manipulate a search engine, but I can imagine the Fund's public affairs officials are happy if as few people as possible can access one of its less prescient publications.

Issued just as the first doubts about the subprime mortgage market in the United States were emerging, the April 2006 report presented a rosy view of the present and the future. The authors did address whether global imbalances, derivatives, and subprime mortgages posed a threat to financial stability. But they liked what they saw.