Daniel Christen and Nicola Shadbolt
Geoeconomic fragmentation is one of the greatest risks to the international monetary and financial system at present, particularly since Russia’s war of aggression against Ukraine. Fragmentation is likely to have wide-ranging implications for the global economy, including increasing the volatility of capital flows and exposing gaps in the global financial safety net (GFSN). In this post, we argue that increased take up of the IMF’s 'precautionary facilities' would reinforce the GFSN and help prepare it for these challenges. The IMF’s upcoming review of precautionary facilities is an opportune moment to find ways to reduce stigma and increase uptake.
