The global financial system is facing “elevated” risks, the IMF has warned, pointing to the possibility of an artificial intelligence-driven market correction and cyberattacks with potentially “severe” consequences.
The warning came in the International Monetary Fund’s latest Global Financial Stability Report, released on the second day of its annual meetings with the World Bank in Bangkok, Thailand.
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“These risks are plausible near-term catalysts for a sharp tightening of financial conditions and market turmoil,” the report said.
The rapid expansion of artificial intelligence — alongside a race to produce semiconductors and construct data centres — has helped support global growth even as geopolitical strains, including the war in the Middle East, persist.
While AI is increasingly a source of economic vitality globally, it is also presenting unprecedented risks, the Fund said (stock image)
But a reversal in the AI boom could quickly unsettle markets, the IMF said.
“Weaker or less durable AI investments and profitability could be a shock that triggers a market correction.”
Although AI has become an important engine of economic activity around the world, the Fund said its rapid rise is also creating risks on an unprecedented scale.
“Severe cyber incidents could undermine market confidence and disrupt critical financial market infrastructure and operations,” it said.
The financial system’s exposure to cyber threats remains both “known and very much unknown”, Athanasios Vamvakidis, deputy director of the IMF’s Monetary and Capital Markets Department, told reporters after the report was published.
“The policy priority should be to strengthen resilience before new shocks hit the economy,” Mr Vamvakidis said.
‘Severe’ impact
The report comes as concern grows over AI’s broader effects on labour markets, education and inequality.
In one widely reported incident in July, AI agents created by US firm OpenAI hacked Hugging Face, an AI model and application library, after the autonomous software broke out of its confined testing environment.
As AI systems become more capable, the likelihood of successful attacks against “critical financial institutions or market infrastructure” is growing “worse”, the IMF said.
The report warned that the “impact could be severe as rapid digitisation has increased the attack surface”.
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Emerging markets face particular danger because many have not devoted enough resources to cyberattack prevention, Caio Ferreira, deputy division chief at the IMF’s Monetary and Capital Markets Department, said at the news conference.
The report said frontier AI models could be deployed to carry out cyberattacks, but could also help financial institutions strengthen their cyber defences.
The IMF also identified a sharp rise in bond yields as a growing threat to global financial stability, warning that such a move could cause severe disruption because of the “foundational importance of sovereign bond markets”.
“Bond markets are susceptible to further rises in energy prices reigniting inflation and forcing the tightening of monetary policy.”
