The fund also warned of a possible "disorderly" surge in government bond yields, which have already reached multidecade highs in several advanced economies. Other primary risks include severe cyberattacks, war, and speculative trading, with 28% of leveraged ETFs now tied to single stock bets, up from 16%. The IMF expects advanced Asian markets to be most vulnerable to these corrections, noting that South Korea's equity market recently dropped as much as 6% on concerns over the semiconductor sector.
Tuesday, October 20, 2026
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IMF Names AI Asset Correction One of 3 Top Global Risks
Global Markets7 days ago
Financial markets face severe instability if the current boom in technology spending fails to produce expected returns, the International Monetary Fund said in its latest Global Financial Stability Report. The IMF identifies an AI asset and debt correction as one of the three largest threats to the system, specifically citing "wrong way risk" in circular financing. A review of 14 deals since 2023 found that big tech firms invested $300 billion in equity and $650 billion in debt into smaller AI startups in exchange for $1.4 trillion in commitments to purchase cloud services and chips. This shift has pushed the share of investment-grade bonds issued by hyperscalers from under 1% in 2024 to 10% today.
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