AT its recent Annual Meetings in Tokyo, the IMF released its latest Global Financial Stability Report, which stated that risks to financial stability have increased and financial markets remain volatile as the crisis in Europe continues.

Financial sector holding back global economic recovery, Policymakers should complete, implement reform agenda as the financial sector the source of this crisis is holding down the recovery in key parts of the global economy.

Policymakers and bankers need to make a clear commitment to act now and lift the debilitating uncertainty plaguing the global financial system as world's financial system remains weak and policies in the major advanced economies have not been sufficient to rebuild confidence.

Change in the global financial structure is not visible yet because policymakers and bankers have delayed implementation of reforms in some places intentionally or unintentionally and because some reforms are meeting resistance. In setting out the challenges facing policymakers and bankers, banks are still weak in many countries. As a result, many borrowers still face very tight borrowing conditions. This creates a feedback loop of tight credit that stifles investment and growth.

The IMF assessed reform progress as part of the Financial Stability Report, and found that reforms are heading in the right direction, but they have not yet delivered a safer financial system.

Also, IMF staff recently conducted a study on the costs of regulatory reform and found that the likely long-term increase in borrowing costs would be about one quarter of one percentage point in the United States, and lower elsewhere.