ICRG And The Global Financial Safety Net: How Is It Faring? An Update from the IMF

The Global Financial Safety Net (GFSN) is a set of institutions and mechanisms that provide countries with insurance against shocks and crises. It offers financing when crises occur and complements countries’ policy responses in cushioning the impact of shocks. The GFSN comprises four layers: (i) international reserves, (ii) bilateral swap arrangements (BSAs), (iii) Regional Financing Arrangements (RFAs), and (iv) the International Monetary Fund.

In this latest Staff Report by the Fund, overall, it was found that the GFSN has remained heavily reliant on non-pooled resources, with uneven country access to different layers.  As a result, some emerging market and developing economies (EMDEs)—particularly low-income countries (LICs)—have relied primarily on the IMF.  Beyond the IMF, the GFSN has had a varying degree of effectiveness in incentivizing sound macroeconomic policies and addressing vulnerabilities to prevent crises. Coordination across the GFSN layers remains largely informal and ad hoc, which constrains its overall effectiveness.

The report adopts a ‘conflict metric’ from our International Country Risk Guide (ICRG), notably, civil war and coup d’etat threat” of the Internal Conflict Dimension and the “Cross-Border Conflict” of the “External Conflict Dimension.”

Have a look: https://www.imf.org/en/Publications/Policy-Papers/Issues/2025/10/09/The-Global-Financial-Safety-Net-A-Stocktaking-571099