Press Briefing Transcript Global Financial Stability Report, Annual Meetings 2026

IMF News, October 13, 2026

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The Global Financial Stability Report identifies three key risks that could trigger market turmoil and tightening financial conditions: an AI‑related market correction, the evolving risk of higher yields, and cyber threats.
The Report notes that "risk appetite has been very strong" but that "this resilience, however, is not necessarily safety."
The Report warns that "each of these risks on its own might be manageable. However, it could trigger unresolved and, in some cases, worsening vulnerabilities, with potential systemic implications."

The Report emphasizes heavy reliance on AI as an engine of resilience for growth and earnings; it stresses a risk of an AI market correction if earnings disappoint or ambitious investment plans fail to materialize.
On the circular funding structure examined in the GFSR: analysis of 14 public transactions finds:
- "$300 billion in equity"
- "$650 billion in debt, including in off‑balance sheet vehicles"
- "in exchange for $1.4 trillion of future revenue commitments"
The Briefing outlines a "triple whammy" risk if AI monetization weakens: equity values could fall, debt may be harder to service, and promised future revenue commitments may not materialize, producing negative feedback loops.
Comparisons with past episodes: the Report notes a key difference from the dot‑com episode is that P/E ratios have fallen because earnings have continued to beat expectations, creating a repeated upward revision cycle that may be hard to sustain.

Under a severe stress test scenario that includes shocks from an AI market correction, energy prices, and the bond market (including through NBFIs), "the banking sector, as a whole, remain resilient."
The Report notes a "tail of banks that will find themselves undercapitalized under stress" and that these banks are "the most exposed to NBFIs."

The Report focuses on NBFIs as an area where risks have migrated since banking regulation tightened post‑global financial crisis.
Observations include:
- Pensions and insurance are increasing exposure to illiquid assets that "could be a problem under market stress."
- Private credit shows "increasing leverage in borrowers," which "could lead through liquidity pressures to restricted credit looking forward in a stress scenario."
- Hedge funds have been expanding rapidly and, under stress, "could lead to an amplification of shocks through leverage and crowded positioning."

The Report expresses concern about hedge funds' growing role, increased leverage, and portfolio overlap; outflows compounded by leverage in concentrated positions could amplify market stress.
The Report discusses central clearing as a policy tool: "the idea is that CCPs can actually favor and ensure appropriate market conditions during these times of stress" by reducing counterparty risk and supporting market liquidity.

The Report observes that emerging markets "have been resilient" with "historically very tight spreads" despite the rate sell‑off, attributing resilience to "strong fundamentals, good policies, but also very strong global risk appetite."
It warns emerging markets could be affected if the rate sell‑off intensifies, and expresses particular concern about "the depletion of buffers in some low‑rated emerging economies" and "increasing reliance to less transparent alternative funding sources in some frontier economies."
On global rates dynamics, the Briefing states:
- Recent sharp moves in yields reflect multiple forces including a shift after the pandemic, energy shocks, sticky inflation, and central bank repricing.
- "Countries with fiscal imbalances have been more vulnerable to these moves" and there is "a positive correlation between the change in yields and fiscal imbalances."
- Markets are "concerned about absorption potential of the huge issuance that is coming from the sovereigns and increasingly also from the private sector at a time that central banks are shrinking their balance sheets."

The Report treats cyber threats as a growing systemic risk driven by three global forces: increasing digitalization (expanded attack surface), concentration and reliance on specific technologies (critical software and cloud providers), and the availability of tools to cyber criminals including AI.
The Briefing highlights preparedness gaps:
- "There are some estimates that consider that it would be necessary [to have] maybe 40 percent more people working on cybersecurity than we have right now."
- Emerging markets are generally seen as less prepared due to resource constraints; priorities include cyber hygiene, incident reporting, crisis coordination, supervisory capacity, third‑party oversight, and cross‑border cooperation.
- Advanced economies should focus on identifying critical service providers and testing operational continuity and interconnections.

Thailand: AI hardware exports have been an offsetting factor to higher energy prices and helped create current account buffers; an AI correction could tighten risk sentiment, cause currency depreciation, and generate capital outflow pressures, so "it is important to build resilience" and "allow the exchange rate to be the shock absorber."
Nigeria: Improvements on the inflation front suggest possibly less tight monetary policy could be appropriate if credibility and clear communication are maintained; post‑recapitalization measures include regulatory steps to prevent risk buildup and monitoring sovereign‑bank exposures.
Morocco: World Economic Outlook colleagues have forecasted a "projected growth of 4.4 percent for the next year"; the banking system "remains sound, liquid, and profitable, and fairly well capitalized," but Morocco is exposed to external forces including high energy prices and currency pressures.

The Report team emphasizes that current strong risk appetite could be positive if it persists, enabling the global economy to handle pressure in rates markets, but warns that policies that reduce risk appetite would be harmful.
Final policy message: "Now is the time to strengthen the financial system" by increasing buffers, reinforcing resilience, and preparing for unforeseen shocks.