Better-than-expected trade figures from China have sent stock markets soaring across Europe and Asia * IMF warns of risks of new financial crisis * US retail sales weaker than expected * JP Morgan profits fall 6.6% * FTSE 100 hits 6300 points * Chinese exports jump 11% in March * Full story: Tesco warns on profit growth 2.00pm BST A day after cutting its global growth forecasts, the International Monetary Fund is talking about the risks of a new financial crisis. Larry Elliott writes: The International Monetary Fund has highlighted risks of a new financial crisis, warning that global output could be cut by 4% over the next five years by a repeat of the market mayhem witnessed during the 2008-9 recession. The IMF used its half-yearly Global Financial Stability Report to call for urgent action on the problems of banks in the eurozone, a third of which it said faced “significant challenges” to be sustainably profitable. “The hardest hit banking systems within the euro area in February have been those of Greece, Italy, and to a lesser extent, Portugal, along with some large German banks, reflecting some or all of the following factors: structural problems of excess bank capacity, high levels of NPLs, and poorly adapted business models.” Noting that threats to global financial stability had increased since its last health check in October, the Fund said: “The main message of this report is that additional measures are needed to deliver a more balanced and potent policy mix for improving the growth and inflation outlook and securing financial stability. In the absence of such measures, market turmoil may recur.” Related: IMF warns of fresh financial crisis 1.51pm BST Five of the top eight US banks do not have credible plans for winding down their operations during a crisis without being bailed out with public money, according to a report from federal regulators. Reuters reports: The “living wills” that the Federal Reserve and Federal Deposit Insurance Corporation jointly agreed were not credible came from Bank of America, Bank of New York Mellon, J.P. Morgan Chase, State Street and Wells Fargo. The requirement for a living will was part of the Dodd-Frank Wall Street reform legislation passed in the wake of the 2007-2009 financial crisis, when the US government spent billions of dollars on bailouts to keep big banks from failing and wrecking the US economy. Continue reading...
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