## Global Financial Stability Report, October 2024 - Steadying the Course: Uncertainty, Artificial Intelligence, and Financial Stability _Global Financial Stability Report, October 2024_ ## Source details **Canonical URL:** [Global Financial Stability Report, October 2024 - Steadying the Course: Uncertainty, Artificial Intelligence, and Financial Stability](https://www.imf.org/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024) ## Other formats - [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) ## Bibliographic details - Published: October 22, 2024 --- ### Overall assessment and key highlight - 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: - lofty asset valuations, - the global rise in private and government debt, - increased use of leverage by nonbank financial institutions. - 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. ### Chapter 1 — Steadying the Course: Financial Markets Navigate Uncertainty - 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: - lofty asset valuations, - global rise in private and government debt, - increased use of leverage by nonbank financial institutions, - strained borrowings of some midsized companies, - acute pressures in the commercial real estate sector. - 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. ### Chapter 2 — Macrofinancial Stability Amid High Global Economic Uncertainty - 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: - The relationship between macroeconomic uncertainty and downside tail risks is stronger when debt vulnerabilities are elevated. - The relationship is stronger when financial market volatility is low (during episodes of a macro-market disconnect). - Cross-border effects: macroeconomic uncertainty can trigger cross-border spillover effects through trade and financial linkages. - Policy responses and resilience measures recommended: - more credible policy frameworks, - building resilience through adequate macroprudential policies and reserve buffers, - reducing fiscal vulnerabilities. ### Chapter 3 — Advances in Artificial Intelligence: Implications for Capital Market Activities - 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: - AI could cause large changes in market structure through the greater and more powerful use of algorithmic trading and novel trading and investment strategies. - Potential benefits: - enabling superior risk management, - deepening market liquidity, - improving market monitoring by both participants and regulators. - Potential new risks: - increased market speed and volatility under stress, - more opacity and monitoring challenges of non-bank financial institutions, - increased operational risks due to reliance on a few key third-party AI-service providers, - increased cyber and market manipulation risks. - Regulatory stance: - Many of these risks are addressed by existing regulatory frameworks, - Important new and unforeseen developments may still arise. - Suggested stance for authorities: consider additional policy responses to ensure preparedness for potentially transformative changes. *Global Financial Stability Report, October 2024 — Steadying the Course: Uncertainty, Artificial Intelligence, and Financial Stability* --- ## Content in this bundle - **Chapter 1 Data** - [Chapter 1 Data (Markdown version)](/-/media/files/publications/gfsr/2024/october/data/ch1data.xlsx.md){rel="alternate" type="text/markdown"} - [Chapter 1 Data (XLSX)](/-/media/files/publications/gfsr/2024/october/data/ch1data.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **Chapter 2 Data** - [Chapter 2 Data (Markdown version)](/-/media/files/publications/gfsr/2024/october/data/ch2data.xlsx.md){rel="alternate" type="text/markdown"} - [Chapter 2 Data (XLSX)](/-/media/files/publications/gfsr/2024/october/data/ch2data.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **Chapter 1 at a Glance** - [Chapter 1 at a Glance (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/ch1revised.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 1 at a Glance (PDF)](/-/media/files/publications/gfsr/2024/october/english/ch1revised.pdf){rel="external" type="application/pdf"} - **Chapter 2** - [Chapter 2 (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/ch2.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 2 (PDF)](/-/media/files/publications/gfsr/2024/october/english/ch2.pdf){rel="external" type="application/pdf"} - **Chapter 2 Annex** - [Chapter 2 Annex (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/ch2annex.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 2 Annex (PDF)](/-/media/files/publications/gfsr/2024/october/english/ch2annex.pdf){rel="external" type="application/pdf"} - **Global Financial Stability Report, October 2024; Chapter 2 Summary** - [Global Financial Stability Report, October 2024; Chapter 2 Summary (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/ch2sum.pdf.md){rel="alternate" type="text/markdown"} - [Global Financial Stability Report, October 2024; Chapter 2 Summary (PDF)](/-/media/files/publications/gfsr/2024/october/english/ch2sum.pdf){rel="external" type="application/pdf"} - **Chapter 3** - [Chapter 3 (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/ch3.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 3 (PDF)](/-/media/files/publications/gfsr/2024/october/english/ch3.pdf){rel="external" type="application/pdf"} - **Chapter 3 Annex** - [Chapter 3 Annex (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/ch3annex.pdf.md){rel="alternate" type="text/markdown"} - [Chapter 3 Annex (PDF)](/-/media/files/publications/gfsr/2024/october/english/ch3annex.pdf){rel="external" type="application/pdf"} - **Global Financial Stability Report, October 2024; Chapter 3 Summary** - [Global Financial Stability Report, October 2024; Chapter 3 Summary (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/ch3sum.pdf.md){rel="alternate" type="text/markdown"} - [Global Financial Stability Report, October 2024; Chapter 3 Summary (PDF)](/-/media/files/publications/gfsr/2024/october/english/ch3sum.pdf){rel="external" type="application/pdf"} - **Executive Summary** - [Executive Summary (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/execsum.pdf.md){rel="alternate" type="text/markdown"} - [Executive Summary (PDF)](/-/media/files/publications/gfsr/2024/october/english/execsum.pdf){rel="external" type="application/pdf"} - **Foreword** - [Foreword (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/foreword.pdf.md){rel="alternate" type="text/markdown"} - [Foreword (PDF)](/-/media/files/publications/gfsr/2024/october/english/foreword.pdf){rel="external" type="application/pdf"} - **Global Financial Stability Report, October 2024; Infographic; October 22, 2024** - [Global Financial Stability Report, October 2024; Infographic; October 22, 2024 (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/infographic.pdf.md){rel="alternate" type="text/markdown"} - [Global Financial Stability Report, October 2024; Infographic; October 22, 2024 (PDF)](/-/media/files/publications/gfsr/2024/october/english/infographic.pdf){rel="external" type="application/pdf"} - **Textrevised** - [Textrevised (Markdown version)](/-/media/files/publications/gfsr/2024/october/english/textrevised.pdf.md){rel="alternate" type="text/markdown"} - [Textrevised (PDF)](/-/media/files/publications/gfsr/2024/october/english/textrevised.pdf){rel="external" type="application/pdf"} --- ## References - [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) _Source: https://www.imf.org/en/publications/gfsr/issues/2024/10/22/global-financial-stability-report-october-2024_