Published by Global Banking & Finance Review®
Posted on April 13, 2026
2 min readLast updated: April 14, 2026
Add as preferred source on GoogleFSB Chair Andrew Bailey warns that rising funding costs could trigger a “double or triple whammy,” as stretched asset valuations, non‑bank leverage and private credit strains may converge despite overall system resilience.
WASHINGTON, April 9 (Reuters) - The global financial system has so far absorbed the economic shock caused by the Iran war, partly thanks to post-2008 crisis reforms, but rising funding costs may exacerbate growing stress in other parts of the system, the chair of the Financial Stability Board warned the G20 on Monday.
Andrew Bailey, the governor of the Bank of England and chair of the FSB, an international financial watchdog, warned of a potential “double or triple whammy” if tighter funding conditions cause multiple vulnerabilities to crystalize at the same time - including stretched asset valuations, non-bank leverage, and private credit stress.
More details from the letter:
*Bailey was writing to G20 Finance Ministers and Central Bank Governors ahead of the International Monetary Fund meeting of global policy leaders in Washington this week.
*Bailey warned that a trigger for financial turmoil could be financial markets moving to price a much larger impact on global economic growth.
*In that scenario, abrupt re-pricing in equity prices could coincide with the already greater focus on valuations in private assets, he wrote.
*Despite the uncertainty, banks have remained resilient, reflecting the strength of post-global financial crisis reforms and underscoring the importance of implementing the Basel III capital rules.
(Reporting by Michelle Price; Editing by Chizu Nomiyama )
Andrew Bailey, chair of the Financial Stability Board and governor of the Bank of England, has warned the G20 about risks to global financial stability.
The main risks include stretched asset valuations, non-bank leverage, and stress in private credit markets.
Tighter funding can trigger vulnerabilities in various parts of the financial system, potentially causing simultaneous financial shocks.
Banks have remained resilient due to post-2008 crisis reforms and stronger capital requirements.
A major trigger could be markets pricing in a larger negative impact on global economic growth, leading to abrupt re-pricing in asset values.
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