More needs to be done to ensure global financial stability, the International Monetary Fund’s monetary and markets chief Jose Vinals said Wednesday.

In a press conference for the 2016 Global Financial Stability Report, Vinals said additional measures are needed to deliver a more balanced and potent policy mix. He also commented on negative interest rates saying, there are limits but they can also benefit economies where they are deployed.

Vinals expressed concern over Britain’s exit from the European Union. He said it would be a negative shock, both economically and financially, for Britain and the EU.

In the report, the IMF said world financial markets have calmed after turmoil earlier this year, but action needs to be taken amid slowing growth, weak commodity prices, and worries about China’s economy.
 
“A key question that we addressed in the report is whether the turmoil that we have seen over the past months is now safely behind us, it’s a one-off event, or is it a warning signal that more needs to be done? And I believe it is the latter: more needs to be done to secure global stability,” Vinals said.

“Much is at stake. Additional measures are needed to deliver a more balanced and potent policy mix. If not, market turmoil may recur and intensify, and could create a pernicious feedback loop of fragile confidence, weaker growth, tighter financial conditions, and rising debt burdens.

“This could tip the global economy into economic and financial stagnation. In such a scenario, we estimate that world output could fall by almost 4 percent, relative to our baseline projections, over the next five years.”