IMF Chief Kristalina Georgieva Warned That Turbulence In Banking Sector Can Cause Global Economy Risks And Increase Financial Instability

IMF Chief Kristalina Georgieva Warning: Kristalina Georgieva, head of the International Monetary Fund (IMF), has warned that financial stability in the global economy is at risk due to turmoil in the banking sector. Kristalina Georgieva said rising interest rates have put pressure on debt, causing stress in major economies, including lenders.

The war in Ukraine and the Kovid epidemic have destroyed the economy – IMF chief

He said that this year the world economy will expand only by 3 percent. Rising debt costs, the war in Ukraine and the Covid pandemic have ravaged the economy. The IMF chief said it is clear that the risks to financial stability have increased following the collapse of Silicon Valley Bank and the purchase of Credit Suisse by UBS.

European Union’s Central Banks are also afraid

When European markets reopen on Monday, investors are keeping an eye on Deutsche Bank shares. The European Central Bank (ECB) said that the recent turmoil in banking will have a real impact on trade and growth. In an interview with Business Post, ECB Vice President Luis de Guindos said that the European Union’s central bank fears that problems in the banking sector will reduce growth and increase inflation.

Silicon Valley bank crisis expected to settle

However, a news has come today about America’s Silicon Valley Bank and it is a good sign for the investors of this bank surrounded by financial crisis. Today this Silicon Valley bank has been bought by First Citizen Bank. To get the bank out of the financial crisis, First Citizen Bankshare Inc. has bought it from the Federal Deposit Insurance Corporation.

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