The International Monetary Fund has sounded a warning about elevated risks facing the global financial system. Among the potential threats are a market correction linked to artificial intelligence and cyberattacks that could cause severe disruption.

The caution came in the Fund’s latest Global Financial Stability Report, released during its annual meetings with the World Bank in Bangkok. The report said these risks could quickly tighten financial conditions and trigger market turmoil in the near term.

The recent boom in AI, along with heavy investment in semiconductors and data centres, has helped support global growth even amid geopolitical pressures. However, growing signs suggest that AI capabilities might be achieved with less investment than expected, or that the economic gains may not match earlier hopes. Weaker or less lasting AI investments and profits could spark a market correction.

While AI is driving economic activity in many places, it also brings new dangers. Severe cyber incidents could damage market confidence and disrupt critical financial infrastructure and operations. Officials noted that the risks from cyber threats are both known and still largely unknown, making it urgent to strengthen resilience before fresh shocks arrive.

The report also highlighted rising bond yields as another concern, given the central role of sovereign bond markets. Higher energy prices could push inflation up again and force tighter monetary policy. Emerging markets with limited resources for cyber defence are seen as especially vulnerable, though advanced AI tools could also help improve protection against attacks.