Resilience, Risk, and Transformation
Global Financial Stability Report
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Overview
- Publication: Global Financial Stability Report — Resilience, Risk, and Transformation.
- Date: October 2026.
- Central finding: Financial markets have remained resilient, supported by solid economic growth and strong corporate earnings, but financial stability risks remain elevated.
Major risks that could trigger market turmoil
- AI-related market corrections:
- Weaker or less durable investment and profitability in artificial intelligence could lead to a correction in AI-related asset prices.
- Corrections could be amplified by rising leverage and concentrated exposures.
- Sovereign bond yield shocks:
- Resurgent inflation or fiscal concerns could drive a sharp rise in sovereign bond yields with potentially broad repercussions across financial markets.
- Cyber threats:
- Increasingly sophisticated cyber threats pose growing risks as finance becomes more digital and interconnected.
Underlying financial vulnerabilities
- Banking sector:
- Although the global banking system remains broadly resilient, pockets of weaker banks persist.
- Nonbank financial intermediation:
- Liquidity mismatches among insurers and pension funds have increased.
- Rising leverage and contingent liquidity risks in private credit could amplify stress.
- Emerging and frontier markets:
- Some emerging markets have seen policy buffers erode.
- Frontier economies have increasingly relied on less transparent forms of financing.
- Tokenized assets:
- Markets for tokenized assets remain small.
- Tokenization can create new channels for the buildup of leverage and mismatches in liquidity and maturity, in addition to elevating risks related to technology and infrastructure.
Hedge funds and financial stability (Chapter 2 findings)
- Size and evolution:
- Globally, hedge funds now hold about $13 trillion in assets, more than three times their 2013 level.
- Roles and risks:
- In calm times, hedge funds can support market liquidity, price discovery, and risk sharing.
- In stress, leverage, crowded positions, and correlated investor redemptions can trigger synchronized deleveraging and asset sales, increasing volatility and straining market liquidity.
- Stress can spill over to prime brokers and magnify global risk shocks in markets with larger hedge fund footprints, particularly where liquidity is thin.
- Policy implications:
- Strengthening resilience requires better data for systemwide risk assessments.
- Prudential measures should be calibrated to the nature and source of hedge fund vulnerabilities.
- Credible central bank backstops are needed to address severe dysfunctions in core markets.
Tokenization: efficiencies and vulnerabilities (Chapter 3 findings)
- Potential benefits:
- Tokenization can streamline the asset life cycle, reducing frictions, improving transparency, and enabling greater automation by integrating functions traditionally performed by multiple intermediaries onto a shared platform.
- Constraints to development:
- Four interrelated constraints: legal certainty, regulatory clarity, interoperability, and the availability of settlement assets.
- Current evidence and risks:
- Tokenized equity markets point to new functionalities, including 24/7 trading, fractional ownership, and emerging on-chain price discovery.
- Because of limited scale, these markets remain less liquid, more volatile, and more fragmented than traditional counterparts.
- As tokenization grows, it may heighten technology and infrastructure dependencies and create new channels through which liquidity risk, interconnectedness, and leverage can propagate and amplify shocks.
- Policy recommendation:
- Policymakers should adopt a technology-neutral approach that removes unnecessary barriers to tokenization while safeguarding financial stability.
Policy priorities and recommendations
- Strengthen resilience across the financial system.
- Enhance transparency to improve systemwide risk assessment.
- Contain excessive leverage in vulnerable sectors.
- Improve preparedness for future shocks through credible backstops and calibrated prudential measures.
Content in this bundle
- Ch1data (XLSX)
- Ch2data (XLSX)
- Background Analysis 1.1
- Background Analysis 1.2
- Background Analysis 1.3
- Background Analysis 1.4
- Chapter 1
- Infographic
- Chapter 2
- Microsoft Word - October 2026 GFRS Chapter 2 - Annex
- Infographic (PDF)
- Summary
- Chapter 3
- Annexes 3.1–3.3: Price Discovery, Tokenization Risk Framework, and Operational Risks
- Executive Summary
- Global Financial Stability Report, October 2026, “Resilience, Risk, and Transformation"
- Summary in Thai
- Summary in Thai
- Executive Summary