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IMF warns of 'elevated' AI risk to world financial system

The IMF has warned that an AI-driven market correction and rising cyber threats pose serious risks to the global financial system.

The IMF has warned 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 Long Sip
What happened

The IMF's latest Global Financial Stability Report, released at its annual Bangkok gathering, flagged elevated risks to the world financial system from AI and cyber threats.

The detail

The IMF warned that weaker-than-expected AI investment returns could trigger a market correction, while severe cyber incidents could disrupt critical financial infrastructure.

What it means

The IMF is urging policymakers to strengthen financial resilience now, before new shocks hit, as the risks from cyber threats are described as both known and very much unknown.

For you

The IMF report flags that cyberattacks on financial institutions are getting worse as digitisation expands, so it is worth checking your bank and super fund have strong security on your accounts.

Full story at RTE.ie

What readers are saying

Natalieo
The IMF highlights that rapid digitisation has increased the attack surface for cyber threats to financial institutions. This means even well known banks now face a much broader range of possible disruptions than before.
RetiredBanjo
The report notes that AI capabilities can be delivered at lower investment levels than expected. That could trigger a market correction faster than many realise.
Bert
The piece says frontier AI models can help with cyber defence. Readers should look at whether their super funds are investing in companies developing those defensive tools.
waynow
Athanasios Vamvakidis pointed out that the priority is building resilience before new shocks hit, which means funds need to check their infrastructure against these emerging threats.
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