WASHINGTON—Russia’s invasion of Ukraine has driven up financial stability risks “on several fronts” and will test the resilience of the global financial system at a time when interest rates are rising sharply, the International Monetary Fund (IMF) warned in its biannual Global Financial Stability Report on Tuesday.
While there has so far been no globally systemic financial event, there are several channels through which the Ukrainian turmoil could be amplified across the system, the IMF warned.
Those include banks’ and non-banks’ direct and indirect exposures to Russia; commodity market disruptions and increased counterparty risk; poor market liquidity and funding strains; cyberattacks and the acceleration of crypto asset use, it said.
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