The global financial safety net has become increasinglyfragmented, making it harder to respond to crises in a world roiledby volatile capital flows, International Monetary Fund (IMF)staffers warned.

Defenses haven't kept up with the growth of external debt inrecent years, the Washington-based fund said in a report releasedThursday. As a result, a system-wide shock could overwhelm theworld's crisis resources, which include nations' foreign-exchangereserves, central-bank swap lines, regional funds such as the euroarea's European Stability Mechanism, and the IMF itself, the lendersaid.

Financial cycles have been “growing in amplitude and duration,capital flows have become more volatile, and non-banks have gainedimportance, altering the nature of systemic risk,” IMF staff saidin the report, which was presented to the fund's executive board onMarch 7. In a major event, “the needs could exceed the collectiveresources available,” the fund said.