The IMF in the Global Financial Stability Report press briefing at the 2026 Annual Meeting held today October 13, in Bangkok, Thailand, said that while market risk appetite was strong,this could not be seen as safety due to three different elements.
“A key question in markets today is whether the pressures we see in the bond market will affect risk sentiment. So far, risk appetite has been very strong.
To a large extent. This has to do with very strong earnings, upward growth surprises, but also optimism about AI.
This resilience, however, is not necessarily safety. And in our report we discussed three key risks that could trigger market turmoil, tightening financial conditions. First, an AI related market correction given very optimistic earnings forecasts and very strong investment plans in the sector.
Second, the evolving risk of higher yields, which, is driven by multiple forces depending on the time, and the country. And third, the known and very much unknown risk of cyber threats, which could disrupt financial services and weaken confidence. 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.” said Athanasios Vamvakidis.
Athanasios Vamvakidis also addressed the depletion of fiscal buffers, and what fiscal policy should do now.
“We are particularly concerned about the depletion of buffers in some low rated emerging economies, and about increasing reliance to less transparent alternative funding sources in some frontier economies.
Given all this, the policy priority should be to strengthen resilience before new shocks hit the economy, to take advantage of the resilience we have seen so far to prepare.
It is therefore very important for fiscal policy to focus on addressing fiscal imbalances and bringing their dynamics back to a sustainable path
The bottom line is that now is the time to strengthen the financial system.”
To watch the full briefing, click here: Global Financial Stability Report Press Briefing | October 2026.
