Rising delinquencies among U.S. subprime mortgages are unlikely to cause a "major dislocation" in the broader market for mortgage-backed securities, the International Monetary Fund said Tuesday.

The U.S. market for mortgages to borrowers with poor credit histories is one risk identified in the IMF's Global Financial Stability Report released in Washington. In addition the IMF warned that banks' increasing globalization could prove a mixed blessing.

On the one hand, it said, globalization strengthens the position of individual banks by letting them spread their risks. On the other hand, it increases linkages among markets, adding to the risk of contagion.

"Supervisors need to collaborate ever more closely in the oversight of cross-border institutions," the report said.

The risks also include a "massive" increase in U.S. leveraged buyouts, rising capital flows to emerging markets, and lopsided global trade and financial flows.

"While none of the individual areas of risk identified constitutes a direct threat to financial stability," the report said, "an adverse event affecting any one of those areas could lead to a reappraisal of risks in the others."

The fund, which is charged with promoting global economic stability and growth, lends to nations in financial distress. It released the report in conjunction with the twice-yearly meeting of its 185 member governments, scheduled next weekend in Washington.

The IMF said the subprime market's woes remain a threat to spread to other markets, including structured mortgage credit products held by international investors. It expressed confidence that the effects would be contained and mentioned signs that the slumping U.S. housing market has begun to stabilize.

"Major dislocation still appears to be a low-probability event," the IMF said.

The rise of private equity buyouts is another risk to global financial stability, it said. Low interest rates and healthy balance sheets, it added, have spurred an increase in these buyouts. This has prompted an increase in indebtedness and poses risks to some providers of financing for buyouts, the report said.

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