Volatility, policy uncertainty, and high financing costs challenge markets, especially in emerging economies
The IMF has warned of growing global financial instability due to increasing market volatility and economic policy uncertainty. According to its latest Global Financial Stability Report, investor confidence is waning, asset prices remain inflated, and financial conditions are tightening – threatening economic growth and capital flows, particularly in emerging markets.
“Financial stability risks are rising fast – policymakers must brace for more market turbulence.” — Tobias Adrian, Financial Counselor, IMF
“High-leverage institutions and debt-heavy economies are vulnerable. Risk mitigation and crisis planning must take priority,” said IMF’s Tobias Adrian.
The IMF urges regulators to strengthen supervision, stress testing, and liquidity tools. For emerging markets, the focus should be on fiscal discipline, resilient financial systems, and safeguarding reserves.
