Global Financial Stability Report (GFSR)

The Global Financial Stability Report (GFSR) is a semiannual assessment published by the International Monetary Fund (IMF) that evaluates risks to global financial stability, with particular attention to emerging-market financing. It appears twice a year (typically April and October) and highlights vulnerabilities, potential stress scenarios, and policy recommendations for central banks, regulators, and governments.

Key takeaways

• The GFSR assesses systemic risks across global financial markets and emerging-market access to financing.
• It replaced two earlier IMF publications—the International Capital Markets Report and the Emerging Market Financing Report—to provide more frequent, integrated analysis.
• The report combines data analysis, stress tests, and scenario work to identify structural and cyclical vulnerabilities.
• Its findings guide policymakers, market participants, and analysts on where risks may build and what policy responses can mitigate them.

Purpose and scope

The GFSR aims to:
* Identify and monitor financial and structural imbalances that could threaten global financial stability.
Examine risks from debt, asset valuations, liquidity conditions, and cross-border linkages.
Analyze implications of macroeconomic trends and crises for financial systems worldwide.
* Offer policy recommendations to reduce systemic vulnerabilities and preserve market functioning.

Typical topics include systemic risk assessments, global and regional debt dynamics, bank and nonbank financial sector vulnerabilities, emerging-market financing conditions, and asset market risks (e.g., housing and corporate credit).

Analytical approach

The report uses a mix of:
* Macro- and micro-level data (sovereign, corporate, household, and financial-sector indicators).
Scenario analysis and stress testing to gauge resilience under adverse shocks.
Cross-country comparisons to identify contagion channels and spillovers.
* Policy evaluation to weigh trade-offs (for example, between supporting recovery and preventing longer-term vulnerabilities).

How policymakers and market participants use it

• Central banks and regulators use the GFSR to inform prudential measures, liquidity support frameworks, and macroprudential policy.
• Governments and multilateral institutions reference it when designing fiscal and financial stability policies.
• Investors and analysts use its risk assessments and scenario work to inform portfolio, credit, and sovereign risk decisions.

Examples from past reports

• April 2021: The GFSR warned of a need to prevent a legacy of financial vulnerabilities arising from pandemic-era policies. It highlighted risks such as stretched asset valuations, rising leverage, and a divergent, asynchronous recovery between advanced and emerging economies.
• April 2019: The report identified growing short- and medium-term risks since October 2018, including vulnerabilities in the euro-area financial sector, strains in China related to leverage and regulatory tightening, and downside risks in global housing markets driven by excessive credit and the prospect of tighter financial conditions.

Implications

The GFSR helps reconcile short-term policy support with medium-term financial stability by flagging where interventions could create unintended vulnerabilities. Its cross-border focus is especially important for emerging markets, which can be sensitive to global liquidity cycles, investor sentiment, and shifts in advanced-economy monetary policy.

Further reading

For full reports and technical annexes, consult the IMF’s Global Financial Stability Report series on the IMF website.