Bri: AI boom, inflation and debt pose risks to growth and stability -2-

The increased weighting of hedging is a major challenge for central banks

(Il Sole 24 Ore Radiocor) - , 28 June - The 2026 report then goes on to analyse other risk factors relating to liquidity in financial markets and high global public debt. “Financial vulnerabilities remain a cause for concern,” writes the BIS. “Liquidity in major bond markets could prove more fragile due to overvalued assets and investor complacency. AI financing is increasingly leveraged, characterised by complex interactions within the AI supply chain.”

Public debt, which is close to record levels, and higher interest rates “are putting a severe strain on fiscal positions in many economies, leaving governments with less room for manoeuvre to respond to future recessions or crises”. Fiscal vulnerabilities, combined with structural changes in sovereign debt markets, “pose a growing risk to financial stability”, adds the institution: “The increasingly important role of non-bank market participants, such as hedge funds, can amplify and accelerate the transmission of market tensions, particularly in some of the major advanced economies. This poses increasingly demanding challenges for central banks”.
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