The International Monetary Fund has warned that major geopolitical events, including trade tensions, could cause major corrections in stock prices.
In its report on global financial stability, the IMF indicated that the correction in turn could lead to market volatility, which could threaten financial stability. Risk metrics based on conflicts, wars, terrorist attacks, military spending, and trade restrictions have increased sharply since 2022.
The IMF urged financial institutions to maintain sufficient capital and liquidity to help deal with potential losses caused by geopolitical risks, and called for the use of stress testing and other analysis to identify and manage these risks.
Source (Al-Arabiya.net Website, Edited)
