The International Monetary Fund has raised concerns about growing financial instability, citing increased risks from U.S. trade policies and market volatility. In its Global Financial Stability Report, the IMF pointed to sharp asset repricing triggered by recent U.S. tariff announcements and warned of potential future shocks.
The report highlighted vulnerabilities including overstretched asset valuations, high leverage among financial institutions, and sovereign debt risks. Nonbank lenders, such as hedge funds and investment funds, were flagged as increasingly influential yet underregulated, potentially amplifying market disruptions. The IMF urged greater transparency and stronger oversight of these institutions. It also emphasized the need for full implementation of Basel 3 banking reforms to bolster resilience.
The report comes as finance leaders meet in Washington and global growth forecasts are revised downward. Additionally, concerns were raised about private credit markets spreading risk across borders and uncertainty over the impact of U.S. tariffs on inflation.
