Finance
G20 risk watchdog warns of potential for financial market crash
Published by Global Banking and Finance Review
Posted on October 13, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 13, 2025
2 min readLast updated: January 21, 2026
G20's risk watchdog warns of potential financial market crash due to uncertain economic conditions, emphasizing the need for global cooperation.
By Marc Jones
LONDON (Reuters) -The latest surge in global share prices and other assets has left markets susceptible to a crash given the current uncertain economic and geopolitical backdrop, the G20's risk watchdog said on Monday.
Financial Stability Board (FSB) Chair, Andrew Bailey, told G20 ministers in a letter the elevated risks made maintaining multilateral co-operation crucial. Not just to prevent crises, but also to support sustainable economic growth.
"While most jurisdictions have seen a rebound in financial markets in recent months, valuations could now be at odds with the uncertain economic and geopolitical outlook, leaving markets susceptible to a disorderly adjustment," the letter dated October 8 and published ahead of G20 meetings in Washington this week, said.
That warning came just days before U.S. President Donald Trump's threat of "massive" new tariffs on China in retaliation for Beijing tightening rare earth restrictions triggered Wall Street's biggest fall in nearly six months.
Bailey also pointed to the ongoing rise in sovereign debt levels, adding that vulnerabilities in the financial system remain high.
"The need for global standards and cooperation therefore remains abundantly clear," the letter said.
In response to the elevated risks, the FSB, which groups central banks and financial regulators from the Group of 20 Economies, will "pivot" its focus, Bailey said.
It will shift it from policy development to monitoring and facilitating the implementation of agreed global financial reforms, which have not been completely achieved.
"The effectiveness of these measures depends on their timely, consistent and comprehensive implementation across all jurisdictions," Bailey said.
(Reporting by Marc JonesEditing by Alexandra Hudson)
Financial stability refers to a condition where the financial system operates effectively, with institutions able to manage risks and absorb shocks without significant disruptions to the economy.
Market conditions describe the current state of the financial markets, including factors such as supply and demand, investor sentiment, and economic indicators that influence asset prices.
Economic growth is the increase in the production of goods and services in an economy over a specific period, typically measured by the rise in Gross Domestic Product (GDP).
A financial crisis is a situation where the value of financial institutions or assets drops significantly, leading to a loss of confidence and potential economic downturn.
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