IMF stress test: AI crash combined with bond market turmoil will push more banks globally to the brink.

PANews October 13 news: The International Monetary Fund said that compared with a year ago, more global banks would be pushed to the brink of danger under a "doomsday scenario." The institution said that even as bank profits soar, AI-related challenges could also endanger banks. The IMF's latest stress test examined how banks would cope with an AI crash, a sharp rise in government bond yields, and an economic slowdown. Under this scenario, 22% of global banking assets would be held by 110 "weak" banks, whose core capital adequacy ratios would fall below 7%, or below the higher thresholds applicable to the world's most complex banks. In last year's test, 18% of banking assets were concentrated in 88 "weak" banks under the stress scenario. The IMF's Athanasios Vamvakidis said that each year's scenario reflects the risks considered relevant at the time and is based on the same methodology. This year, with energy supply disruptions, concerns about an AI bubble, and rising yields, the risks facing the global economy have amplified.