Navigating economic shifts: The AI boom, public debt, and financial market risks ꟷ Lessons from the BIS Annual Report 2026
The global economy proved resilient to shocks, from tariffs to the war in Iran, aided by AI-driven investment and optimism that supported spending and accommodative financial conditions. Yet risks have intensified: the war’s inflationary scars could persist, and the AI boom’s durability is uncertain. These vulnerabilities add to existing financial imbalances and elevated public debt. Central banks confront a tighter fiscal–financial nexus as high public debt meets a larger role for leveraged non-banks in sovereign markets. This amplifies stress transmission, making swings in sovereign yields more frequent and abrupt, tightening financial conditions and unsettling inflation expectations. Elevated debt complicates monetary transmission and raises the likelihood of the need for interventions to address market dysfunction.
Lessons from the BIS Annual Report 2026
Welcome by Ernest Gnan, Secretary General · SUERF
Moderated by Fiorella De Fiore, Research Adviser, Monetary and Economic Department · BIS and SUERF Council
The AI boom and Risks to the Outlook
Frank Smets, Acting Head of Monetary and Economic Department & Head of Economic Analysis and Statistic · BIS & SUERF Fellow
Discussant: Era Dabla-Norris, Deputy Director, Fiscal Affairs Department · IMF
Rising Public debt and Financial Market Fragilities
Gaston Gelos, Deputy Head of the Monetary and Economic Department & Head of Financial Stability Policy · BIS
Discussant: Filiz Unsal, Deputy Director, Policy and Research Branch in the Economics Department · OECD & SUERF Fellow
Q&A session
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