IMF: Vinals says economic outlook at risk of downgrade

The world's economic recovery is weak and some assets are still overpriced, a senior International Monetary Fund official said on Thursday. ‘The global economic recovery is really mediocre and subject to downgrade risk. We have been downgrading our economic forecasts for the past five years,’ Jose Vinals, director of monetary and capital markets at the IMF, told the British Bankers' Association annual conference.  ‘There are many markets where assets are now slightly overpriced. You don't find anything that's grossly out of line, grossly super-valued or over-valued but you see many little discrepancies across many markets regarding valuations,’ Vinals said. He said an IMF study of 300 of the largest banks showed only about 60 per cent had a structure that was able to make a reasonable rate of return over time to be able to build capital and support new lending. Only about 30 per cent of eurozone banks could meet that requirement, compared to about 80 per cent in the United States, Vinals said, according to Reuters.