the war in Ukraine and the China-United States-Corriere.it tensions weigh heavily

Geopolitical tensions and fragmentation emerge as serious threats to financial stability. what the economists of the International Monetary Fund claim, in chapter 3 of the Global Financial Stability Report (Gfsr). The rising tensions could generate a cross-border capital outflow, increasing uncertainty and threatening macro-financial stability. I am mostly concerned the Russian invasion of Ukraine and tensions between China and the United States, which have led to a reduction in investment between the two countries of around 15% since 2016.

Financial institutions, regulators and supervisors should be aware of the risk to financial stability from a potential increase in geopolitical tensions and work to identify, quantify, manage and mitigate these threats, the report reads. Policy makers should be aware that the imposition of financial restrictions for reasons of national security could have unintended consequences for global macro-financial stability. Given the significant risks to global macro-financial stability, multilateral efforts to reduce geopolitical tensions and financial and economic fragmentation should be strengthened.