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Recent Editions
Risk Channel
North America
The IMF has warned that growing dependence on AI investment could expose the global economy to a significant slowdown if the technology fails to meet expectations. Speaking at the IMF and World Bank annual meetings in Bangkok, financial leaders highlighted how surging spending on data centers, semiconductors, and related infrastructure is supporting U.S. growth and driving strong Asian exports. However, the IMF's downside scenario suggests that disappointing AI returns could trigger falling investment, declining stock markets, and weaker exports, potentially reducing global economic growth by as much as 1.3 percentage points in 2028. Alternative scenarios suggest AI could deliver substantial productivity gains, although supply constraints might initially increase inflation and interest rates. The IMF also warned that AI-enabled cyberattacks pose growing risks to financial stability. Managing director Kristalina Georgieva cautioned that investors may overestimate AI's immediate benefits, creating the potential for market disruption before longer-term productivity gains materialize.
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Risk Channel
UK/Europe
Andrew Bailey, the Governor of the Bank of England, has expressed concern about the potential for misunderstanding regarding liability when AI agents mishandle financial transactions. Speaking at a G30 conference in Bangkok, he pointed to the need for regulators to address the "agentic issue" as AI's role in financial operations grows. Bailey added that effective model testing is crucial for risk management while the cyber-risk threat to the financial sector is "absolutely" urgent, echoing concerns raised by Kristalina Georgieva, managing director of the IMF. Meanwhile, the FT reports that G7 finance ministers are planning emergency drills to combat potential cyber-attacks on the financial sector, driven by concerns over AI risks.
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