Financial markets remain resilient despite tensions driven by the Middle East conflict, according to the latest Global Financial Stability Report.
While the conflict has caused periods of volatility, markets have avoided major disruptions such as sharp losses, margin calls, or forced sell-offs. This stability is supported by central bank liquidity measures, improved market structures, and well-capitalized banks.
However, risks remain. Rising public and private debt, along with the growing role of leveraged non-bank investors, are increasing pressure on bond markets. Emerging markets are particularly exposed to sudden shifts in global investor sentiment.
The report also warns that many countries now have limited policy space after years of economic support measures.
Policymakers are being urged to closely monitor vulnerabilities, strengthen oversight, and stay ready to act, while also addressing emerging risks such as cybersecurity linked to artificial intelligence.