The International Monetary Fund says the global financial system is facing several difficult transitions as world economies seek greater stability.
IMF financial counselor Jose Vinals said Wednesday there are key questions facing world economic powers like the United States, Japan and Europe's 17-nation euro currency bloc, as well as fragile emerging markets.
He questioned how smoothly the United States will be able to move from a period when its central bank, the Federal Reserve, has been pumping more money into the world's largest economy to boost its recovery from the 2009 economic downturn to normalization without monetary support.
Vinals said emerging markets in developing countries also face new challenges, with some investors withdrawing funds they had invested during the global recession.
"Corporate balance sheets have weakened, financial vulnerabilities are rising, and economic growth is slowing. And all this exposes these countries to more severe market stress," he warned.
Vinals said policy changes in the eurozone countries have eased the three-year governmental debt crisis, but corporate debt remains a problem, with banks facing big losses on bad loans.
He also questioned whether stimulus measures in Japan, the world's third largest economy, will push the country out of its lengthy period of economic difficulties.
But Vinals said if policies throughout the world are "properly managed," global economic stability can be achieved, leading to greater economic growth.