IMF Flags AI Risks, Cyber Threats To Global Financial Stability

The IMF warned on Tuesday of "elevated" risks faced by the global financial system, with potential perils including an AI-related market correction and cyber threats that could have "severe" consequences.

The cautionary message was delivered by the International Monetary Fund's latest Global Financial Stability Report, published on the second day of its annual gatherings with the World Bank, held this year in Thailand's capital, Bangkok.

"These risks are plausible near-term catalysts for a sharp tightening of financial conditions and market turmoil," the report said.

The recent boom in artificial intelligence -- and the related rush to manufacture semiconductors and build data centres -- has provided a boost to global growth despite geopolitical pressures including the Middle East war.

However, "growing evidence suggests that AI capabilities can be delivered at lower investment levels... or that potential economic gains may not be as large as expected," the IMF warned.

"Weaker or less durable AI investments and profitability could be a shock that triggers a market correction."

And while AI is increasingly a source of economic vitality globally, it is also presenting unprecedented risks, the Fund said.

"Severe cyber incidents could undermine market confidence and disrupt critical financial market infrastructure and operations," it said.

The risks posed by cyber threats to the financial system are both "known and very much unknown", Athanasios Vamvakidis, deputy director of the IMF's Monetary and Capital Markets Department, told reporters after the report's launch.

"The policy priority should be to strengthen resilience before new shocks hit the economy," Vamvakidis said.

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