Global Financial Stability Report, October 2024: analytical chapters available now, main chapter on October 22

Global Financial Stability Report, October 2024: Analytical Chapters

Chapter 2: Macrofinancial Stability Amid High Global Economic Uncertainty

Uncertainty regarding global economic outcomes and policies has been higher since the COVID-19 pandemic amid inflation shocks, rising geopolitical tensions, emerging technologies, and climate-related disasters. This chapter examines the implications of high macroeconomic uncertainty for macrofinancial stability by studying its association with downside tail risks to future output growth, asset prices, and bank lending growth. The findings show that high macroeconomic uncertainty can significantly raise downside risks for economic and financial stability, and the relationship may be stronger when macrofinancial vulnerabilities are elevated, or financial market volatility is low (during episodes of a macro-market disconnect). Moreover, macroeconomic uncertainty can trigger cross-border spillover effects through trade and financial linkages. More credible policy frameworks and building resilience through adequate macroprudential policies and reserve buffers, and by reducing fiscal vulnerabilities could help mitigate the adverse consequences of high macroeconomic uncertainty. 

Chapter 3: Advances in Artificial Intelligence: Implications for Capital Market Activities

Chapter 3 assesses recent developments in AI and Generative AI and their implications for capital markets, using new analytical work and results from a global outreach to market participants and regulators. Evidence from labor markets and patent filings suggests that adoption of AI in capital markets is likely to increase significantly in the near future, and AI could cause large changes in market structure through the greater and more powerful use of algorithmic trading and novel trading and investment strategies. AI may reduce some financial stability risks by enabling superior risk management, deepening market liquidity, and improving market monitoring by both participants and regulators. At the same time, new risks may arise, including increased market speed and volatility under stress, more opacity and monitoring challenges of non-bank financial institutions, increased operational risks as a result of reliance on a few key third-party AI-service providers, and increased cyber and market manipulation risks. Many of these risks are addressed by existing regulatory frameworks, but important new and unforeseen developments may arise. To ensure relevant authorities are prepared for these potentially transformative changes, they should consider additional policy responses.

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COMING SOON

Launch of the October 2024 Global Financial Stability Report

The Global Financial Stability Report provides an assessment of the global financial system and markets, and addresses emerging market financing in a global context. It focuses on current market conditions, highlighting systemic issues that could pose a risk to financial stability and sustained market access by emerging market borrowers. The Report draws out the financial ramifications of economic imbalances highlighted by the IMF's World Economic Outlook. It contains, as special features, analytical chapters or essays on structural or systemic issues relevant to international financial stability.

RELEASE DATES

TUESDAY, OCTOBER 22, 10:15 AM ET: Press Briefing: Global Financial Stability Report
AVAILABLE NOW: Chapter 2: Macrofinancial Stability Amid High Global Economic Uncertainty
AVAILABLE NOW: Chapter 3: Advances in Artificial Intelligence: Implications for Capital Market Activities

The chapters will be available for download on this page starting on October 15. Stay tuned for updates!