Report · International body
Global Financial Stability Report, April 2026: Global Financial Markets Confront the War in the Middle East and Amplification Risks
The global financial system has withstood the war in the Middle East with orderly corrections, but the IMF warns that risks are asymmetric.
- Organization
- International Monetary Fund (IMF)
- Document date
- 14 April 2026
- Type
- Report
- Language
- English
- Scope
- International
- Length
- 86 pages
What it contains
The April 2026 edition of the Global Financial Stability Report concludes that risks are elevated. Markets have corrected in an orderly manner, but the longer the conflict lasts, the greater the likelihood that financial conditions, very accommodative before the war, tighten more abruptly. Since February, global equities have fallen 8 %, sovereign yields have risen with inflation expectations and emerging market assets have suffered from a stronger dollar and higher energy prices, especially in commodity-importing and more vulnerable countries.
Chapter 1 examines amplification channels: high public debt and issuance concentrated in short maturities, which raise rollover risk and revive the bank-sovereign link; capital outflows and carry trade unwinds in emerging economies; forced selling by hedge funds and other leveraged nonbank intermediaries; signs of more defaults in private credit; and a possible slowdown in investment in artificial intelligence. Chapter 2 studies why portfolio flows to emerging economies increasingly depend on nonbank investors and shows that nonresidents are more sensitive to global risk than residents.
The recommendations include ensuring that liquidity and funding facilities are accessible and operationally ready, preserving price stability while watching the pass-through to inflation expectations, having emerging markets keep strengthening their policy frameworks, putting public debt on a sustainable path, completing the implementation of the Basel framework and closing the data gaps on nonbank intermediaries. It also calls for applying stress tests or scenario analyses to banks and, where possible, to those intermediaries.
Why it matters for risk management
It is a context source for monitoring market, liquidity and country risk, and for defining stress scenarios with external shocks like those that hit emerging economies. It is a global analysis; applying it to the Dominican Republic requires comparing it with local data.
Summary prepared by the Dominican Republic Risk Management Club from a reading of the original document, with the source verified on 7 October 2026. It does not replace reading the official text and is not advice.
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