By Alexander Lee 
 

International Monetary Fund (IMF) Managing Director Kristalina Georgieva attended the China Development Forum in Beijing on March 26. 
 
 
Amid the spreading banking crisis following the bankruptcy of Silicon Valley Bank (SVB), the IMF managing director warned that global financial stability is being shaken.
Georgieva emphasized the need to be vigilant against recent turmoil in the banking sector during the forum, according to Agence France-Presse (AFP) and others. She pointed out that 'in times of high debt levels, low-interest loans can quickly turn into high-interest rates due to consecutive interest rate hikes by major countries, inevitably increasing stress and vulnerability,' a phenomenon that has already been proven in the banking sectors of some advanced countries.
The managing director explained that the financial uncertainty has undoubtedly increased following a series of events such as the bankruptcy of Silicon Valley Bank and the sale of Credit Suisse. High-interest rate policies by central banks worldwide to curb inflation have put pressure on debt, causing major countries' lending institutions to face stress. She added that while the US and Swiss governments and central banks responded to the banking crisis, uncertainty remains.
Georgieva predicted that the global economic growth rate would fall below 3% this year due to the rising debt costs. Luis de Guindos, Vice President of the European Central Bank (ECB), also expressed concern in an interview with the Irish media Business Post that problems in the banking sector could lower the economic growth rate. He added that if credit standards in the Eurozone are tightened, it will impact the lowering of the growth rate.
The managing director expressed hope that China's economic rebound would positively impact the world economy. The IMF predicts that China's economy will grow by 5.2% this year as it recovers from the impact of the COVID-19 pandemic. Georgieva stated that 'China's strong economic rebound will account for about a third of this year's global growth. If China's GDP growth rate increases by 1.0 percentage point, the growth rates of other Asian countries will increase by an average of 0.3 percentage points.'
 
Reporter Alexander Lee alexanderlee_24@newsyn.co.kr