IMF Cautions of a Downturn in AI Market Cyber Risks to The Monetary System
The IMF cautioned Tuesday that the global financial system faces elevated risks, including a possible AI-driven market correction and cyberattacks that could have severe effects.
The warning appeared in the International Monetary Fund’s current Global Financial Stability Report, issued on the second day of the annual meetings with the World Bank, this time in Bangkok, Thailand. The research said these risks are credible near-term drivers for a dramatic tightening of financial conditions and market volatility. The rise of artificial intelligence and the accompanying rush to build semiconductors and data centres has helped lift global development despite geopolitical challenges like the war in the Middle East.
However, the IMF said there is growing evidence that AI skills may be offered with less investment, or that the potential economic advantages may not be as great as hoped. A decline driven by lower-quality or less durable AI investments and profitability could shock the market. “And while AI is increasingly a driver of economic vitality around the world, it is also bringing enormous threats, the Fund added. Serious cyber incidents could erode confidence in the market and disrupt essential financial market infrastructure and operations,” it warned.
Cyber attacks represent “known and very much unknown” dangers to the financial system, Athanasios Vamvakidis, deputy director of the IMF’s Monetary and Capital Markets Department, told reporters after the research was launched. “The policy priority should be to build resilience before new shocks hit the economy,” added Vamvakidis.
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