The International Monetary Fund (IMF) has warned that a potential artificial intelligence (AI) market correction, rising government borrowing costs, and cyberattacks could threaten global financial stability despite resilient markets.
The warning is contained in the Fund’s latest Global Financial Stability Report, released on Tuesday during the IMF-World Bank Annual Meetings in Bangkok, Thailand.
The report said strong corporate earnings, economic growth, and optimism about AI had helped markets withstand recent shocks. However, it cautioned that disappointing returns from AI investments could trigger a market sell-off, while inflation, rising public debt, and increased borrowing could push bond yields higher.
The IMF also warned that cyberattacks could disrupt financial services and undermine confidence in the global financial system.
Although banks remain broadly resilient under stress tests, the Fund said weaker institutions could face capital shortfalls. It also flagged risks from private credit firms, hedge funds, insurers, and pension funds, whose exposure to illiquid assets and leverage could amplify market shocks.
The IMF urged governments to put public debt on a sustainable path and called on central banks to maintain their independence, control inflation, and communicate policy decisions clearly. It also stressed the need for stronger cybersecurity and closer monitoring of risks across banks and non-bank financial institutions.
The Fund warned that unresolved vulnerabilities could turn future market disruptions into wider financial instability if policymakers fail to act.
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