According to the IMF’s Global Financial Stability Report for October 2025, risks in global financial markets remain elevated despite recent calm. The report highlights over-stretched asset valuations, pressure in sovereign bond markets and growing role of non-bank financial institutions (NBFIs). IMF
These vulnerabilities are interlinked: higher government borrowing, thinner investor bases in some markets and maturity-mismatches in banking systems amplify the risk of sudden market shocks. The IMF cautioned that a sharp increase in yields or an abrupt asset correction could cascade into wider financial instability.
For investors, this means that while markets may appear stable, underlying fragilities warrant caution. Diversification, risk-management and monitoring of global credit and liquidity trends are key. Emerging market debt and NBFI exposures merit particular attention.