IMF warns of AI market correction, cyber threats to financial system
While AI is increasingly a source of economic vitality globally, it is also presenting unprecedented risks, the Fund said
The International Monetary Fund has issued a warning regarding the potential risks posed by artificial intelligence to the global financial system. In its latest Global Financial Stability Report, released during the World Bank's annual gathering in Bangkok, the IMF highlighted "elevated" risks stemming from AI-related market corrections and cyber threats that could lead to "severe" consequences for the financial sector.
The rapid growth of AI, driven by the demand for semiconductors and data centers, has contributed to global growth despite geopolitical tensions. However, the IMF notes that AI capabilities might be achievable with lower investment levels or that anticipated economic gains could be overestimated. This potential underperformance could trigger a market correction.
Cybersecurity remains a pressing concern, as severe cyber incidents could undermine market confidence and disrupt critical financial infrastructure. Athanasios Vamvakidis, deputy director of the IMF's Monetary and Capital Markets Department, emphasized that the policy focus should be on enhancing resilience before new shocks hit the economy.
The report emphasizes the increasing threat of cyberattacks, which are worsened by the rapid digitization of financial systems. The IMF warns that emerging markets with insufficient resources for cyber prevention are particularly vulnerable to such attacks. While advanced AI models could potentially be used for cyberattacks, they also have a role in cybersecurity defense.
Another risk highlighted by the IMF is a surge in bond yields, which, if uncontrolled, could result in significant shocks due to their foundational importance in sovereign bond markets. Energy price increases driving inflation and forcing monetary tightening could exacerbate this vulnerability.
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