Michelle Toh, CNN
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The head of the International Monetary Fund called for greater vigilance over the global financial system during a speech in China on Sunday in which she also pointed to \u201cgreen shoots\u201d emerging in the world\u2019s second-largest economy.<\/p>\n\n\n\n
\u201cRisks to financial stability have increased,\u201d IMF Managing Director Kristalina Georgieva said<\/a> during remarks at the China Development Forum in Beijing.<\/p>\n\n\n\n Georgieva lauded how policy-makers had acted swiftly in response to the banking crisis, citing the recent collaboration by major central banks to boost the flow<\/a> of US dollars around the world.<\/p>\n\n\n\n \u201cThese actions have eased market stress to some extent,\u201d she said. \u201cBut uncertainty is high, which underscores the need for vigilance.\u201d<\/p>\n\n\n\n Global investors have been on high alert about the health of the banking sector following the sudden downfalls of Credit Suisse<\/a>, Silicon Valley Bank<\/a> and US regional lender Signature Bank<\/a>.<\/p>\n\n\n\n Last week, concerns about Deutsche Bank<\/a> and speculation over one of its bond payments also weighed on markets, prompting EU leaders<\/a> to reassure the public over the resilience of Europe\u2019s banking system.<\/p>\n\n\n\n Georgieva said Sunday that the IMF was continuing to watch the situation, and assess potential implications for the global economic outlook.<\/p>\n\n\n\n Meanwhile, she reiterated an IMF projection<\/a> that the world economy will see growth slow to just under 3% this year, due to continued fallout from the pandemic, the war in Ukraine<\/a> and tighter monetary policies.<\/p>\n\n\n\n That\u2019s compared to the historic average of 3.8%, according to Georgieva, and down from 3.2% in 2022<\/a>.<\/p>\n\n\n\n But she also pointed to the emergence of \u201cgreen shoots\u201d in China, where the IMF expects the recently reopened economy<\/a> to expand by 5.2% this year. That\u2019s roughly in line with Beijing\u2019s official target<\/a> of 5%.<\/p>\n\n\n\n