BIS Flags Global Financial System Risks Amid Economic Fragmentation

The Bank for International Settlements (BIS) has warned of growing instability in the global financial system, citing geopolitical fragmentation, rising protectionism, climate risks, and ageing populations as key stressors.

Outgoing BIS General Manager Agustin Carstens described the world economy as facing a “pivotal moment”. While inflation has cooled from post-COVID highs, public trust in price stability has weakened, the report noted.

Although the US dollar has slid 10% this year, BIS economic adviser Hyun Song Shin said fears of a global shift away from US assets are overstated. The BIS also highlighted stablecoins as a rising concern and reported record profits in 2024.