Global financial stability has improved over the past six months, bolstered by better macroeconomic performance and continued accommodative macroeconomic policies, but fragilities remain. The two-speed recovery ?modest in advanced economies and robust in emerging market economies has posed different policy challenges for countries. In advanced economies hit hardest by the crisis, governments and households remain heavily indebted, to varying degrees, and the health of financial institutions has not recovered in tandem with the overall economy. Emerging market economies are facing new challenges associated with strong domestic demand, rapid credit growth, relatively accommodative macroeconomic policies, and large capital inflows. Geopolitical risks could also threaten the economic and financial outlook, with oil prices increasing sharply amid fears of supply disruptions in the Middle East and North Africa.The main task facing policymakers in advanced economies is to shift the balance of policies away from reliance on macroeconomic and liquidity support to more structural policies ?less "leaning" and more " cleaning" of the financial system. This will entail reducing leverage and restoring market discipline , while avoiding financial or economic disruption during the transition. Thus, ongoing policy efforts to withdraw(implicit)public guarantees and ensure bondholder liability for future losses must build on more rapid progress toward stronger bank balance sheets, ensuring medium-term fiscal sustainability and addressing excessive debt burdens in the private sector.For policymakers in emerging market economies, the task is to limit overheating and a buildup of vulnerabilities ?to avoid " cleaning" later. Emerging market economies have continued to benefit from strong growth relative to that in advanced economies, accompanied by increasing portfolio capital inflows. This is putting pressure on some financial markets, contributing to higher leverage, potential asset price bubbles, and inflationary pressures. Policymakers will have to pay increasing attention to containing the buildup of macro-financial risks to avoid future problems that could inhibit their growth and damage financial stability.