A recent report showed that strained relations between China and the United States and Russia's war in Ukraine have led to increased financial isolation over the past few years.
According to the International Monetary Fund, these tensions have slowed international investment and hurt payment systems and asset prices, undermining global financial stability. This in turn will lead to instability by increasing banks' financing costs, reducing their profitability, and reducing their lending to the private sector.
According to the report, which comes in the wake of the Silicon Valley Bank collapse and the subsequent financial system crisis, the imposition of fiscal constraints, increased uncertainty, cross-border credit, and outflows resulting from escalating tensions, could increase the risk of bank debt replenishment and financing costs.
Source (Al-Arabiya.net Website, Edited)
