{ "title": "Global Financial Stability Report, October 2024 - Steadying the Course: Uncertainty, Artificial Intelligence, and Financial Stability", "publication": "Global Financial Stability Report, October 2024", "sourceUrl": "https://www.imf.org/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024", "canonical": "https://www.imf.org/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024", "overlayPath": "/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024/index.md", "summary": "

Chapter 1 of the October 2024 Global Financial Stability Report shows that although near-term financial stability risks have remained contained, mounting vulnerabilities could worsen future downside risks by amplifying shocks, which have become more probable because of the widening disco", "sections": [ { "heading": "Overall assessment and key highlight", "content": "- Financial stability risks remain contained in the near term, although rising economic and geopolitical uncertainty increases the likelihood of adverse shocks, exposing fragilities.\n- Accommodative financial conditions have remained in place with an expectation that monetary policy will continue to ease globally; on net, emerging markets have remained resilient and asset price volatility has stayed low.\n- Accommodative conditions that keep near-term risks contained also facilitate the buildup of vulnerabilities, including:\n - lofty asset valuations,\n - the global rise in private and government debt,\n - increased use of leverage by nonbank financial institutions.\n- The widening disconnect between elevated economic uncertainty and low financial volatility increases the probability that adverse shocks will be amplified by these mounting vulnerabilities.\n- Pressures on the commercial real estate sector remain acute, and some midsized companies' borrowings are becoming increasingly strained.\n- The slowing growth outlook in China, together with fragilities in its financial system, is identified as a key downside risk to the global economy.\n- Policymakers face urgency to address these vulnerabilities." }, { "heading": "Chapter 1 — Steadying the Course: Financial Markets Navigate Uncertainty", "content": "- Near-term financial stability risks have remained contained, but mounting vulnerabilities could worsen future downside risks by amplifying shocks.\n- Financial conditions: accommodative, with expectations of continued monetary policy easing globally.\n- Observed resilience: emerging markets have remained resilient; asset price volatility has stayed low, on net.\n- Key vulnerabilities highlighted:\n - lofty asset valuations,\n - global rise in private and government debt,\n - increased use of leverage by nonbank financial institutions,\n - strained borrowings of some midsized companies,\n - acute pressures in the commercial real estate sector.\n- Amplification mechanism: the widening disconnect between elevated economic uncertainty and low financial volatility increases the probability that shocks will be amplified.\n- Downside external risk: slowing growth outlook in China and fragilities in its financial system may constrain access to funding for economies with weaker fiscal buffers." }, { "heading": "Chapter 2 — Macrofinancial Stability Amid High Global Economic Uncertainty", "content": "- Context: 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.\n- Main finding: high macroeconomic uncertainty can significantly raise downside tail risks to future output growth, asset prices, and bank lending growth.\n- Conditional strengths of the relationships:\n - The relationship between macroeconomic uncertainty and downside tail risks is stronger when debt vulnerabilities are elevated.\n - The relationship is stronger when financial market volatility is low (during episodes of a macro-market disconnect).\n- Cross-border effects: macroeconomic uncertainty can trigger cross-border spillover effects through trade and financial linkages.\n- Policy responses and resilience measures recommended:\n - more credible policy frameworks,\n - building resilience through adequate macroprudential policies and reserve buffers,\n - reducing fiscal vulnerabilities." }, { "heading": "Chapter 3 — Advances in Artificial Intelligence: Implications for Capital Market Activities", "content": "- Scope: 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.\n- Adoption signals: evidence from labor markets and patent filings suggests that adoption of AI in capital markets is likely to increase significantly in the near future.\n- Potential market-structure effects:\n - AI could cause large changes in market structure through the greater and more powerful use of algorithmic trading and novel trading and investment strategies.\n- Potential benefits:\n - enabling superior risk management,\n - deepening market liquidity,\n - improving market monitoring by both participants and regulators.\n- Potential new risks:\n - increased market speed and volatility under stress,\n - more opacity and monitoring challenges of non-bank financial institutions,\n - increased operational risks due to reliance on a few key third-party AI-service providers,\n - increased cyber and market manipulation risks.\n- Regulatory stance:\n - Many of these risks are addressed by existing regulatory frameworks,\n - Important new and unforeseen developments may still arise.\n- Suggested stance for authorities: consider additional policy responses to ensure preparedness for potentially transformative changes.\n\nGlobal Financial Stability Report, October 2024 — Steadying the Course: Uncertainty, Artificial Intelligence, and Financial Stability\n\n---\n\n Content in this bundle\n\n- Chapter 1 Data\n - Chapter 1 Data (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 1 Data (XLSX){rel=\"external\" type=\"application/vnd.openxmlformats-officedocument.spreadsheetml.sheet\"}\n- Chapter 2 Data\n - Chapter 2 Data (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 2 Data (XLSX){rel=\"external\" type=\"application/vnd.openxmlformats-officedocument.spreadsheetml.sheet\"}\n- Chapter 1 at a Glance\n - Chapter 1 at a Glance (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 1 at a Glance (PDF){rel=\"external\" type=\"application/pdf\"}\n- Chapter 2\n - Chapter 2 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 2 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Chapter 2 Annex\n - Chapter 2 Annex (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 2 Annex (PDF){rel=\"external\" type=\"application/pdf\"}\n- Global Financial Stability Report, October 2024; Chapter 2 Summary\n - Global Financial Stability Report, October 2024; Chapter 2 Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Global Financial Stability Report, October 2024; Chapter 2 Summary (PDF){rel=\"external\" type=\"application/pdf\"}\n- Chapter 3\n - Chapter 3 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 3 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Chapter 3 Annex\n - Chapter 3 Annex (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Chapter 3 Annex (PDF){rel=\"external\" type=\"application/pdf\"}\n- Global Financial Stability Report, October 2024; Chapter 3 Summary\n - Global Financial Stability Report, October 2024; Chapter 3 Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Global Financial Stability Report, October 2024; Chapter 3 Summary (PDF){rel=\"external\" type=\"application/pdf\"}\n- Executive Summary\n - Executive Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Executive Summary (PDF){rel=\"external\" type=\"application/pdf\"}\n- Foreword\n - Foreword (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Foreword (PDF){rel=\"external\" type=\"application/pdf\"}\n- Global Financial Stability Report, October 2024; Infographic; October 22, 2024\n - Global Financial Stability Report, October 2024; Infographic; October 22, 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Global Financial Stability Report, October 2024; Infographic; October 22, 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Textrevised\n - Textrevised (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Textrevised (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Previous Issues\n- Blog by IMF Financial Counsellor Tobias Adrian\n- Press Conference\n- Transcript\n- https://origin-blogs.imf.org/en/blogs/articles/2024/10/15/how-high-economic-uncertainty-may-threaten-global-financial-stability\n- Replay the Event\n- https://origin-blogs.imf.org/en/blogs/articles/2024/10/15/artificial-intelligence-can-make-markets-more-efficient-and-more-volatile\n- Replay the Event\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024" } ], "bullets": [ "[Markdown version](/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024/index.md)", "[Structured JSON version](/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024/index.json)", "[Bundle manifest](/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024/bundle-manifest.json)", "Published: October 22, 2024", "Financial stability risks remain contained in the near term, although rising economic and geopolitical uncertainty increases the likelihood of adverse shocks, exposing fragilities.", "Accommodative financial conditions have remained in place with an expectation that monetary policy will continue to ease globally; on net, emerging markets have remained resilient and asset price volatility has stayed low.", "Accommodative conditions that keep near-term risks contained also facilitate the buildup of vulnerabilities, including:", "The widening disconnect between elevated economic uncertainty and low financial volatility increases the probability that adverse shocks will be amplified by these mounting vulnerabilities.", "Pressures on the commercial real estate sector remain acute, and some midsized companies' borrowings are becoming increasingly strained.", "The slowing growth outlook in China, together with fragilities in its financial system, is identified as a key downside risk to the global economy.", "Policymakers face urgency to address these vulnerabilities.", "Near-term financial stability risks have remained contained, but mounting vulnerabilities could worsen future downside risks by amplifying shocks.", "Financial conditions: accommodative, with expectations of continued monetary policy easing globally.", "Observed resilience: emerging markets have remained resilient; asset price volatility has stayed low, on net.", "Key vulnerabilities highlighted:", "Amplification mechanism: the widening disconnect between elevated economic uncertainty and low financial volatility increases the probability that shocks will be amplified.", "Downside external risk: slowing growth outlook in China and fragilities in its financial system may constrain access to funding for economies with weaker fiscal buffers.", "Context: 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.", "Main finding: high macroeconomic uncertainty can significantly raise downside tail risks to future output growth, asset prices, and bank lending growth.", "Conditional strengths of the relationships:", "Cross-border effects: macroeconomic uncertainty can trigger cross-border spillover effects through trade and financial linkages.", "Policy responses and resilience measures recommended:", "Scope: 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.", "Adoption signals: evidence from labor markets and patent filings suggests that adoption of AI in capital markets is likely to increase significantly in the near future.", "Potential market-structure effects:", "Potential benefits:", "Potential new risks:", "Regulatory stance:", "Suggested stance for authorities: consider additional policy responses to ensure preparedness for potentially transformative changes.", "**Chapter 1 Data**", "**Chapter 2 Data**", "**Chapter 1 at a Glance**", "**Chapter 2**", "**Chapter 2 Annex**", "**Global Financial Stability Report, October 2024; Chapter 2 Summary**", "**Chapter 3**", "**Chapter 3 Annex**", "**Global Financial Stability Report, October 2024; Chapter 3 Summary**", "**Executive Summary**", "**Foreword**", "**Global Financial Stability Report, October 2024; Infographic; October 22, 2024**", "**Textrevised**", "[Previous Issues](https://www.imf.org/en/Publications/GFSR)", "[Blog by IMF Financial Counsellor Tobias Adrian](https://origin-blogs.imf.org/en/blogs/articles/2024/10/22/global-financial-fragilities-mount-despite-rate-cuts-and-buoyant-markets)", "[Press Conference](https://www.imf.org/en/Videos/view?vid=6363606786112)", "[Transcript](https://www.imf.org/en/News/Articles/2024/10/22/tr-102224-transcript-of-gfsr)", "[https://origin-blogs.imf.org/en/blogs/articles/2024/10/15/how-high-economic-uncertainty-may-threaten-global-financial-stability](https://origin-blogs.imf.org/en/blogs/articles/2024/10/15/how-high-economic-uncertainty-may-threaten-global-financial-stability)", "[Replay the Event](https://www.imf.org/en/Videos/view?vid=6363286163112)", "[https://origin-blogs.imf.org/en/blogs/articles/2024/10/15/artificial-intelligence-can-make-markets-more-efficient-and-more-volatile](https://origin-blogs.imf.org/en/blogs/articles/2024/10/15/artificial-intelligence-can-make-markets-more-efficient-and-more-volatile)", "[Replay the Event](https://www.imf.org/en/Videos/view?vid=6363296283112)" ], "related": [ { "title": "Chapter 1 Data", "role": "dataset", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/october/data/ch1data.xlsx", "summary": { "path": "/-/media/files/publications/gfsr/2024/october/data/ch1data.xlsx.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/october/data/ch1data.xlsx", "mime": "application/vnd.openxmlformats-officedocument.spreadsheetml.sheet" } }, { "title": "Chapter 2 Data", "role": "dataset", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/october/data/ch2data.xlsx", "summary": { "path": "/-/media/files/publications/gfsr/2024/october/data/ch2data.xlsx.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/october/data/ch2data.xlsx", "mime": "application/vnd.openxmlformats-officedocument.spreadsheetml.sheet" } }, { "title": "Chapter 1 at a Glance", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/october/english/ch1revised.pdf", "summary": { "path": "/-/media/files/publications/gfsr/2024/october/english/ch1revised.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/october/english/ch1revised.pdf", "mime": "application/pdf" } }, { "title": "Chapter 2", "role": "chapter", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/october/english/ch2.pdf", "summary": { "path": "/-/media/files/publications/gfsr/2024/october/english/ch2.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/october/english/ch2.pdf", "mime": "application/pdf" } }, { "title": "Chapter 2 Annex", "role": "online-annex", "sourceUrl": "https://www.imf.org/-/media/files/publications/gfsr/2024/october/english/ch2annex.pdf", "summary": { "path": "/-/media/files/publications/gfsr/2024/october/english/ch2annex.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/gfsr/2024/october/english/ch2annex.pdf", "mime": "application/pdf" } }, { "title": "Global Financial Stability Report, October 2024; 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