CFA Council Ranks Geopolitical Shocks and AI Cyberattacks as Top Risks

The report, Ranking Systemic Risks and Vulnerabilities, assesses 13 threats by how immediate they are, how quickly they could spread and whether their consequences could be irreversible. The council describes the ranking as a qualitative assessment of accumulating vulnerabilities, not a forecast of whether or when a crisis will occur.

Artificial intelligence appears in several parts of the assessment. Alongside attacks on financial infrastructure, the council identifies AI-related investment concentration and market bubbles, misinformation and labour-market disruption. “The next financial crisis may not begin in a bank. It could begin with a cyberattack on payment systems, a geopolitical confrontation or the sudden collapse of a crowded investment thesis,” said Simon Johnson, a council co-chair and 2024 Nobel laureate in economics.

For the medium term, the report points to three structural vulnerabilities: weaker safeguards at systemically important banks alongside rising leverage and limited transparency among non-bank financial institutions; sovereign debt pressures from persistent deficits, higher borrowing costs and possible policy errors; and closer links between crypto assets, stablecoins and traditional financial institutions, which the council says open new channels for contagion. Longer-term concerns include AI-related job displacement, gradual climate change and pandemics.

The council brings together former policymakers and financial experts under the CFA Institute, an association of investment professionals. Its other co-chair is Erkki Liikanen, chair of the IFRS Foundation board of trustees. The report draws on research by the IMF, Financial Stability Board, Bank for International Settlements and World Economic Forum, as well as council discussions. It is intended to help regulators, policymakers and market participants set preparedness priorities.