Current and former Tesla employees working in the company's open-air "tent" factory say they felt pressure to take shortcuts to hit aggressive Model 3 production goals,...Technologyread more
The one-to-eight stock split would mean the current number of ordinary shares — which stands at 4 billion — will increase to 32 billion. It comes ahead of a reported Hong Kong...Asia Marketsread more
Minutes from the Reserve Bank of Australia's monetary policy meeting in July showed the central bank was ready to adjust interest rates if required.Asia Marketsread more
China's fiscal spending increased 10.7% in the first six months from a year earlier, the finance ministry said on Tuesday, underlining the government's bid to support the...China Economyread more
The findings by McKinsey and Company come amid a year-long tariff fight between the U.S. and China, which has spilled into areas such as technology and security.China Economyread more
Microsoft's considerable reach into the corporate world isn't something Slack CEO Stewart Butterfield is very concerned about.Technologyread more
In a closed-door meeting at a Manhattan mansion, executives outlined changes to controversial software that was implicated in two crashes.Aerospace & Defenseread more
President Donald Trump and the RNC are picking up key supporters in the business community who did not back him as a candidate in 2016.2020 Electionsread more
Amazon workers in Minnesota and Germany are striking as Prime Day kicks off, in a stand against working conditions and wage practices. The action in Minnesota represents the...Retailread more
Treasury Secretary Steven Mnuchin is raising red flags ahead of Facebook's proposed cryptocurrency launch.Marketsread more
Beto O'Rourke's campaign for the 2020 election raised just $3.6 million in the second quarter of this year, putting him in the lower tier of candidates who have struggled to...2020 Electionsread more
(Adds quote from IMF's Tobias Adrian)
WASHINGTON, April 10 (Reuters) - Risks to the global financial system have grown over the past six months and could increase with a messy British exit from the European Union or an escalation of U.S.-China trade tensions, the International Monetary Fund said on Wednesday.
The IMF, whose spring meetings with the World Bank begin in Washington this week, noted that the global economic expansion is slowing, and an abrupt downturn could have a far-reaching impact.
"After years of economic expansion, global growth is slowing, sparking concerns about a deeper downturn," Tobias Adrian, head of the IMF's monetary and capital markets department, said at a briefing to discuss the international lender's Global Financial Stability Report.
The IMF warned against rolling back prudential regulations that could help to buffer the financial system in the event of a downturn.
"There is a risk that positive investor sentiment could deteriorate abruptly, leading to a sharp tightening of financial conditions," the IMF said in its report. "This will have a larger effect on economies with weaker fundamentals, greater financial vulnerabilities, and less policy space to respond to shocks."
On Tuesday, the IMF cut its expectations for global growth to its lowest level since 2016, its third downgrade since October. In Wednesday's report, it cautioned a sharper-than-expected slowdown could spur tighter financial conditions.
In Wednesday's report, the IMF urged policymakers to clearly communicate any changes to their monetary policy stances to minimize market swings. Noting investor sentiment had improved since the U.S. Federal Reserve paused its rate-hiking cycle, it warned that a strong shift in Fed policy could trigger a sell-off in riskier assets.
CORPORATE DEBT CONCERNS
The IMF also echoed concerns raised by U.S. officials over rising corporate debt levels, saying that corporate sector risks appear elevated in about 70 percent of systemically important countries.
A rapid tightening of financial conditions could drive a steep economic downturn, as creditworthiness in the corporate debt market has deteriorated. The stock of lower-rated investment-grade bonds has quadrupled since the 2008 financial crisis, and the stock of speculative-grade credits has nearly doubled.
"The U.S. corporate credit cycle appears to be at its highest point in recent history," the IMF said, adding that global earnings growth has "likely peaked."
The IMF noted that trading in British and European markets has remained orderly as authorities struggle to negotiate an orderly British exit deal.
However, it warned that a protracted stalemate threatens to "unsettle financial markets, damage investors confidence, (and) adversely affect business investment."
Globally, trade-dependent sectors have risen on expectations of a positive outcome for U.S.-China trade talks, the IMF said, but if those talks falter the organization expects a renewed sell-off.
To guard against financial vulnerabilities, the IMF said policymakers should proactively deploy prudential tools, such as the countercyclical capital buffer and bank stress testing. In particular, regulators should develop tools to tackle climbing corporate debt from non-bank intermediaries.
"A rollback of regulatory reforms should be avoided," it added. (Reporting by Pete Schroeder Editing by Lisa Shumaker and Paul Simao)