Financial Stability Review – October 20251. The Global Macro-financial Environment
Summary
The global financial system has remained relatively stable amid elevated uncertainty, but has become increasingly vulnerable to potential disruptions materialising in a rapidly changing environment.
In April, larger and broader-than-expected tariff announcements by the US administration triggered a sharp correction in global asset prices. Volatility in international financial markets has subsided over recent months – to long-run average levels or below – as the prospect of the most severe form of retaliatory global trade war receded somewhat. However, the international outlook remains uncertain, including in relation to fiscal sustainability concerns in some advanced economies and the possible lagged effects of tariff increases on prices and activity in the United States. Meanwhile, households and businesses in advanced economies have been supported by easing credit conditions over the past year or so, having largely absorbed the impact of earlier monetary tightening and cost pressures. Pockets of vulnerable households and businesses continue to show signs of stress, though these pressures are expected to ease further. Systemically important banks in advanced economies remain well positioned to absorb an increase in non-performing loans, should the risk of an economic downturn be realised.
Heightened risk in the international system extends beyond trade, fiscal policy and historically low risk premia in financial markets, and is manifesting along multiple dimensions, including armed conflict, increasing cyber and operational incidents, regulatory divergence and the physical and transition risks associated with climate change. In this environment, stress events have the potential to interact with – and amplify – existing vulnerabilities, with uncertain implications for the resilience of a global financial system that is highly integrated.
Against this backdrop, three key global vulnerabilities stand out as having the potential to significantly affect financial stability in Australia:
- Vulnerabilities in key international financial markets, including sovereign debt markets, interacting with persistent vulnerabilities in the global NBFI sector. Despite rising geopolitical tension, and fiscal sustainability challenges in a number of large advanced economies, risk premiums in global equity and credit markets remain low, and sovereign bond term premia are only around long-term averages. Forward-looking measures of financial market volatility are also generally subdued. A reassessment of the likelihood or consequences of key risks materialising would therefore make international financial markets vulnerable to sharp corrections. Highly leveraged trading strategies employed by hedge funds, liquidity mismatches among bond funds, concentration in equity markets, and interlinkages across the global financial system, have the potential to amplify an adverse shock.
- Operational vulnerabilities resulting from increasing digitalisation and interconnectedness, with increased potential for operational incidents to interact with other stress events. The rapid digital transformation of the financial system has the capacity to support efficiency and innovation. At the same time, it has heightened operational risks in an environment of rising cyber risk alongside elevated geopolitical tensions. The system has also become more interconnected, in part reflecting third-party concentration risk in critical services (including where these are provided offshore). The potential for operational incidents to occur alongside financial stress, such as a liquidity shock, increases the scope of coordination required across regulators, government and industries in responding to such events.
- Longstanding vulnerabilities in China’s financial and property sectors. Persistent weakness in the property sector, amid a structural rebalancing in the Chinese economy, remains a vulnerability for real estate companies, local government finances and the wider Chinese financial system. Chinese banks continue to experience pressure on margins and asset quality issues; liquidity concerns also emerged recently in pockets of the system. Authorities have intervened to recapitalise state-owned banks and encourage regional bank consolidation, and the ongoing local government debt swap program is helping to mitigate some of the pressures in the financial system. However, these challenges are unlikely to dissipate for some time, and a material disruption to financial stability in China would affect the Australian financial system indirectly, via global risk sentiment and trade channels.
1.1 Key developments
Despite persistent uncertainty, global financial markets have recovered quickly from the volatility experienced in April.
Risk premia in global equity markets have returned to very low levels after recent bouts of volatility, despite persistent heightened risks. In April, global equity and credit markets experienced significant price declines, and volatility in sovereign bond markets increased sharply, as market participants reacted to US tariff announcements and heightened trade policy uncertainty. However, that volatility was short-lived and sentiment has since recovered, assisted by an initial pause in US tariffs and subsequent developments suggesting that some of the more extreme downside risks for global activity are less likely to materialise.1 Equity markets have since risen strongly, retracing earlier declines to reach record highs in some countries, and equity risk premia are at historically compressed levels (Graph 1.1). Valuations and market concentration remain historically elevated, with the top 10 companies – most of which are technology-related stocks – accounting for more than 40 per cent of total market capitalisation in the US S&P 500 index. Recent increases in equity prices likely reflect better-than-expected earnings results, investor expectations about future returns and optimism that tariff-related uncertainty will ease.
Liquidity mismatches and leveraged strategies of some global NBFIs remain areas of concern to international regulators, amid rapid growth over recent years. The total value of assets managed by open-ended funds (OEFs) and money market funds (MMFs) in the euro area and United States was at or near historical peaks in early 2025, following a period of sustained growth starting in late 2022. While these funds typically use limited leverage, they are vulnerable to abrupt redemption outflows during periods of market volatility requiring them to sell assets quickly, potentially exacerbating market disruption. The gross notional exposures of US hedge funds increased on average around 13 per cent annually since early 2020, outpacing growth in US bank assets, to reach US$34 trillion in April 2025. Leverage at US hedge funds has also increased over this period; their borrowing from repo and prime broker sources (including major global banks) has grown to record levels (Graph 1.2).
Investment conditions for private equity and credit funds have become a little more challenging. Growth in assets under management for private credit funds slowed over 2024, after a period of rapid growth. This reflected a slowdown in new capital raised from investors, leading to a decline in funds committed but not yet invested (‘dry powder’). Relatedly, some global private equity funds are experiencing difficult conditions for selling (‘exiting’) assets, causing delays in the return of capital to investors that is often reinvested into new private equity funds. Internationally, regulators have noted how growing private markets can bring both benefits and risks to the financial system, although data gaps and opaque interlinkages hinder a full assessment, and many funds in the sector are yet to experience a full credit cycle.2 The Financial Stability Board (FSB) recently announced it will be conducting an analytical deep dive on vulnerabilities in private credit, which will include the identification of data challenges in this area.3
Corporates and households in advanced economies have generally been resilient.
Financial market participants’ expectations for corporate earnings remain positive overall, but the impact of tariffs on businesses has yet to fully materialise. While aggregate earnings expectations for the corporate sector were initially revised down after the US tariff announcements, 12-month ahead earnings forecasts have since recovered, with earnings now expected to remain steady or increase from current levels (Graph 1.3). However, the potential for more material disruptions to global trade remains a downside risk for the corporate sector. That is particularly true for the sectors more directly exposed to the fallout from trade frictions – such as consumer discretionary, energy and industrials sectors. Distance-to-insolvency measures, which are timely indicators of corporate health, deteriorated the most in these US sectors following the tariff announcement in April and analysts have downgraded estimates of their forward earnings. More broadly, while bilateral trade flows have been adjusting with limited impact on aggregate global trade volumes to date, greater disruption to global supply chains could weigh on activity in sectors with higher trade exposures, and a weakening in economic conditions could disproportionally impact cyclical industries and erode their debt-servicing capacity.
Financing conditions have remained accommodative for most corporates, but some borrowers – particularly those at the lower end of the credit spectrum – could face challenges when refinancing in coming years. Most bond spreads have retraced to the lower end of historical ranges, after widening across the ratings spectrum in April. Overall, accommodative financing conditions have allowed most firms to refinance without significant difficulties, including to extend their debt maturity profiles; year-to-date gross corporate bond issuance has been strong, following a short pause in US high-yield issuance in April. However, around one-fifth of European and US corporate debt is due to mature in the next two financial years, and some borrowers are still expected to refinance longer term loans at higher rates, which may present a challenge for some firms. In addition, default rates on speculative-grade debt remain elevated in both Europe and the United States (Graph 1.4). Corporate default outcomes are concentrated in out-of-court debt restructurings, for which there is an increased risk of firms re-entering default if underlying issues are not resolved. Elevated default rates could increase refinancing costs for these issuers, particularly if policy rates do not decline in line with current market pricing. More generally, any sudden change in risk sentiment, or corporate earnings expectations, that widens corporate bond spreads could exacerbate refinancing challenges faced by more-vulnerable firms.
Households’ balance sheets have strengthened over recent years, and financial pressures are expected to continue easing gradually. Households in advanced economies have largely weathered the impact of earlier monetary policy tightening, supported by strong labour market outcomes. Debt-to-income ratios have declined from recent peaks, and the run-up in housing prices and equity wealth has supported the balance sheets of many households. Debt servicing ratios have also started declining in many advanced economies, supported by wages growth and easing policy rates (Graph 1.5). However, financial strains persist among some renter, highly indebted and/or low-income households, including those who relied on consumer credit to manage their budgets during the recent period of elevated interest rates and cost-of-living pressures. A period of lower interest rates will assist indebted households, although the effects on mortgage holders vary across jurisdictions. In economies with a high share of shorter fixed-rate tenors, such as New Zealand, effective mortgage rates are expected to decline further as outstanding loans continue to reprice to lower rates. By contrast, in Canada and the United Kingdom, around one-third of households remain on low fixed-rate mortgages taken out during the pandemic, and these are yet to reprice at higher rates. In the United States, most borrowers are on long-term fixed rates below current market levels, limiting their sensitivity to interest rate changes.
However, vulnerabilities could build in the context of policy easing. Mortgage credit growth has so far responded moderately to the policy easing phase (Graph 1.6). However, some central banks have cautioned that financial stability vulnerabilities could increase if a deterioration in lending standards leads to rapid growth in household borrowing and house prices.4 While in the short term household finances might be supported by policy easing, in the medium term, household resilience could weaken if greater risk-taking is driven by overly optimistic expectations of future labour market conditions or policy easing. Caution is warranted since the full impact of US tariffs on global economic activity, inflation and labour market conditions remains uncertain. Further, an abrupt correction in global equity and fixed income markets, some of which are trading at historically stretched valuations, may impact some households that have increased their exposure to the stock market in recent years.
Systemically important banks in advanced economies remain resilient, but downside risks to the global economy could weigh on asset quality and profitability going forward.
Large banks remain well capitalised and maintain liquidity buffers above regulatory minimums, but fragmentation in the international regulatory architecture could undermine this resilience over time. Common Equity Tier 1 capital ratios have been supported by solid earnings growth over recent years (Graph 1.7). Net interest margins have declined only modestly despite monetary policy easing in many advanced economies. Non-interest income also contributed to recent growth in earnings, particularly in the United States where revenues from investment banking and trading activities remain strong. Recent regulatory reviews and stress tests provide some comfort that banks would be well positioned to absorb losses from a severe economic shock, though some of the 2025 test scenarios have reportedly been somewhat milder than in recent years. In addition, regulators continue to discuss the suitability of liquidity risk frameworks in light of the rapid nature of deposit runs in the digital era.5 Should geopolitical tensions lead to material regulatory divergence in relation to capital and liquidity requirements across major economies, the risk of regulatory arbitrage would increase, and the resulting fragmentation could weaken the global banking system’s resilience to future shocks.
Non-performing loans (NPLs) remain low overall, with some exceptions in the consumer and commercial real estate sectors (Graph 1.8). Overall NPL ratios are near multi-year lows across many advanced economies, with little divergence between large banks and smaller institutions, and capital buffers are significant. However, arrears remain elevated for consumer credit and commercial real estate (CRE) loans in some jurisdictions, reflecting ongoing cost-of-living pressures and structural shifts in CRE demand respectively.6 A downturn in economic conditions would place further pressure on some corporate borrowers, including in already weaker performing segments such as small- and medium-enterprises in the euro area; this could prompt some lenders to increase provisioning levels.
1.2 Key vulnerabilities that could affect financial stability in Australia
Uncertainty in the global financial system remains elevated. While the likelihood of a severe reciprocal global trade war appears to have diminished somewhat, the threat of international trade fragmentation is weighing on the global economic outlook; so a more material disruption to global trade and financial markets cannot be ruled out. Armed conflicts in Ukraine and the Middle East have not been resolved, and beyond these areas, geopolitical tensions remain elevated. This macro-environment could put further pressure on the fiscal outlook in major economies where debt sustainability concerns have been rising. The risk of disruptions to financial institutions from cyber-attacks and operational outages is also elevated, and could be amplified by geopolitical tensions. Separately, lenders, insurers and investors remain exposed to losses from physical and transition risks associated with climate change, including rising uninsurability. Against this backdrop, cooperation to strengthen global financial resilience remains a key objective of international bodies such as the FSB, including through continued implementation of globally agreed standards.7
In this environment of heightened risk in the international system, stress events have the potential to interact with existing vulnerabilities and generate disruptive international shocks. Three global vulnerabilities stand out as having the potential to significantly impact financial stability in Australia (outlined below).
Key vulnerability #1 – Vulnerabilities in key international financial markets, including sovereign debt markets, could be amplified by leverage and liquidity mismatches in global NBFIs and lead to disorderly price adjustments.
Global financial markets continue to price a benign economic outlook and remain vulnerable to sharp corrections. Despite rising geopolitical tension, risk premia in global credit and equity markets have returned to historically low levels, while concentration in equity markets, particularly among technology-related stocks, remains elevated, increasing the potential for a disorderly price correction. Concerns about fiscal sustainability have also become more prominent in some advanced economies, with supply and demand imbalances in sovereign debt markets increasing the risk of disruption in periods of stress (see Box: Demand and supply trends in sovereign bond markets). The spike in volatility in April demonstrated that the release of disappointing economic news, policy announcements or geopolitical events can lead to sudden shifts in asset prices and underlying market functioning (Graph 1.9). Persistent vulnerabilities in the operating models of some types of global NBFIs, including leveraged hedge funds, liquidity mismatches among bond OEFs and opaque interconnections with other parts of the financial system, have the potential to amplify such shocks (Graph 1.2).
While markets continued to function during the episode of volatility in April, and global NBFIs weathered the event, the pausing of tariffs, and the avoidance of acute escalation in global trade tensions, likely forestalled immediate market stress. In April, global financial markets, including the US dollar and Treasury markets, experienced liquidity strains amid heightened volatility. Some historical correlation patterns also broke down, although markets did not experience the extreme dislocations seen in past crises.8 Highly leveraged hedge funds avoided major disruptions, but the partial unwinding of leveraged ‘relative value’ strategies by some hedge funds was a contributing factor to volatility in US Treasury markets. Outflows of assets from euro area, UK and US OEFs were also more muted across major financial centres compared with recent episodes of stress (Graph 1.10). However, had the period of high volatility not been cut short by the pause on some tariffs, strained liquidity, elevated trading volumes and position unwinding could have led to greater stress in market functioning and among NBFIs.
Box: Demand and supply trends in sovereign bond markets
Fiscal spending plans in many overseas advanced economies are expected to substantially increase the supply of sovereign debt. Planned fiscal expansion in Europe and the United States is expected to increase government debt supply and raise debt-to-GDP ratios in major overseas advanced economies.9 These supply pressures are becoming more apparent in advanced economy sovereign bond markets. Long-end government bond yields have generally risen despite a period of policy easing, reflecting increases in term premia. Some recent auctions in the United States and Japan have cleared at higher-than-expected yields at longer maturities, which may indicate reduced investor interest in absorbing additional issuance.10
The share of short-term sovereign debt issuance has increased significantly, raising refinancing and interest rate risk. As yield curves have steepened and uncertainty in the macro-financial environment has remained elevated, some sovereign issuers have sought to increase short-term issuance. While higher short-term issuance enables sovereign issuers to avoid paying the term premium typically demanded by investors on long-duration debt, it also elevates refinancing and rollover risks.11 Short-term Treasury securities (T-bills) now account for nearly half of new sovereign issuance among OECD countries, up from a pre-pandemic average of 36 per cent.12 This is more pronounced in the United States, where US T-bills accounted for almost 80 per cent of issuance in 2024 (Graph 1.11).
The role of price-sensitive private investors in the US Treasury market has continued to grow, which could make the market more susceptible to pro-cyclicality. As central banks have unwound pandemic-era quantitative easing measures, and the recycling of foreign exchange reserves from central banks into advanced economy bond markets has also levelled out in recent years, private investors are absorbing a larger share of sovereign debt, including in the United States (Graph 1.12). The increasing role of price-sensitive buyers may make conditions in sovereign bond markets more susceptible to pro-cyclicality, which may amplify volatility and strains in market liquidity in periods of stress. Hedge funds have emerged as a large marginal purchaser of US Treasuries in particular, often employing leveraged strategies that could be vulnerable to adverse yield movements or sudden increases in margining requirements.13 MMFs continue to be a large, structural source of demand for T-bills, but could face liquidity mismatches in a stress event, as they often allow daily redemptions.14 Should stablecoins continue to experience rapid growth, any subsequent redemption runs they experience could also have the potential to amplify stress in their backing assets, which include T-bills (see 4.2 Focus Topic: Recent Trends in Stablecoins and Considerations for Financial Stability). Cross-border linkages and interconnectedness among global NBFIs could further increase the spread of contagion across sovereign bond markets and amplify existing vulnerabilities in the sector.
Regulatory developments could support resilience in the US Treasury market. The implementation of central clearing rules for cash market and repo transactions across 2026–2027 is expected to reduce counterparty credit risk and mitigate risks associated with less transparent bilateral clearing arrangements.15 Proposed changes to the supplementary leverage ratio in the United States could also ease capital requirements on large US banks from holding less risky assets such as Treasuries on their balance sheets. While this may alleviate some intermediation constraints for primary broker-dealers and improve their willingness and capacity to supply liquidity to the US Treasury market, the net impact on market functioning and the overall resilience of banks remains uncertain, particularly under stressed market conditions.16
Key vulnerability #2 – The growing digital complexity and interconnectedness of the financial system is creating operational vulnerabilities, increasing the potential for operational incidents to interact with other stress events.
The digital transformation of the financial system is delivering increased efficiency and improved services, but has also contributed to greater operational vulnerabilities for financial institutions. The fast adoption of new technologies, increased reliance on external service providers and the introduction of novel products and services, offer benefits for both financial institutions and their customers and can enhance risk management. However, increased complexity, opacity and concentration of linkages across the global financial system mean the exposure of key institutions and markets to operational disruptions has grown.17 Reliance on a concentrated network of essential service providers, often located offshore and outside the financial regulatory perimeter, increases the risk that technology outages disrupting core activities of a financial institution, or third party, could have system-wide effects (e.g. 2024 Crowdstrike incident).18
There is increased risk of operational disruptions occurring alongside, and interacting with, other stress events. The financial sector, and third-party service providers, continue to be targets for cyber-attacks. A range of malicious actors seek to exploit operational weaknesses, with the potential to cause financial losses, disrupt critical infrastructure and affect public confidence in the financial system.19 When a cyber-attack or technology outage materialises alongside other risks, such as liquidity, in an episode of stress, these disruptions can interact in complex ways and affect the financial system through multiple channels.
In the medium-to-longer term, increased use of decentralised-finance innovations such as stablecoins could introduce new links between financial and operational risk. For example, as use of these new instruments becomes more integrated into the traditional financial system, they may accelerate the speed of transactions and expose large institutions to disruptions in smart contracts or blockchains. Recent changes to the regulatory framework for some of these products, particularly in the United States, are expected to accelerate the interconnectedness (see 4.2 Focus Topic: Recent Trends in Stablecoins and Considerations for Financial Stability).
Building operational resilience remains a priority for policymakers globally and for the CFR agencies in Australia.20 This includes how financial institutions monitor and manage the evolving risk landscape, as well as crisis response coordination across industry and government.
Key vulnerability #3 – Longstanding vulnerabilities in the Chinese financial system could result in stress spilling over internationally.
Weakness in the Chinese property sector, amid a structural rebalancing in the Chinese economy, remains a vulnerability for the Chinese financial system. Conditions in the Chinese housing market remain very weak. Prices and sales of new housing (which makes up most of overall housing transactions) have declined further over recent months. Consistent with the experience of other international property sector downturns, pre-owned property prices have also experienced a sustained decline in China (Graph 1.13). Chinese banks, and particularly rural commercial banks, maintain material direct exposures to the property sector. Risks to banks from the mortgage book are mitigated by moderate loan-to-valuation ratios. Nevertheless, property developers remain under heavy pressure; many are imposing deeper haircuts on creditors amid a recent rise in debt restructurings, reflecting limited cash flows and deteriorating asset valuations. Household vulnerabilities also remain elevated as property prices have declined and household income growth is slowing. This has contributed to a rise in banks’ household NPL ratios though they remain low overall.21
The Chinese banking system continues to experience pressure on margins and asset quality issues (Graph 1.14). Banks’ net interest margins have narrowed further to reach historically low levels (particularly for rural commercial banks) alongside the recent easing in benchmark policy rates. Capital adequacy and liquidity coverage ratios remain broadly adequate; however, concerns surrounding asset quality in the financial system persist. Some liquidity concerns also emerged in June as banks lowered deposit rates and some depositors responded by reallocating a larger portion of funds to riskier assets. The potential for additional deposit reallocation away from the banking system hampers the further lowering of deposit rates to support already narrow net interest margins. This, in turn, could constrain further monetary policy easing in response to future economic headwinds, including worse-than-expected outcomes from US-China trade tensions.
Interventions by Chinese authorities to date have helped to mitigate pressures on the financial system. The authorities are undertaking a broad push to improve the resilience of the financial sector. State-owned banks have been recapitalised by the authorities, and consolidation in the banking sector has continued through several mergers of smaller rural banks. In addition, the ongoing local government debt swap program has helped to mitigate interconnectedness with the banking sector and improved liquidity conditions, easing pressure on regional banks.22 As a result, the outlook for some local government financing vehicles – in regional and high-risk provinces – is more stable and the risk of default has declined.
Instability in the Chinese financial system could affect the rest of the world, with a larger effect on Australia, via increased risk aversion in global financial markets and slower economic growth. A shock to the Chinese financial system is unlikely to have a direct impact on financial stability in Australia as the direct links between China and Australia’s financial systems are limited. The key channels of transmission of financial stress in China to Australia would likely be via increased risk aversion in global financial markets, a sharp slowing in global economic activity, lower global commodity prices and reduced Chinese demand for Australian goods and services. Were this to materialise, the Australian dollar exchange rate would be expected to continue to act as an automatic stabiliser and help to offset some of the negative impact on the Australian economy.
Endnotes
For further analysis of the effects of trade policy changes, see RBA (2025), ‘Box A: How are Global Trading Patterns Adjusting to Changes in Trade Policy, and What Does It Mean for Australia?’, Statement on Monetary Policy, August. 1
See, for example, Bank of England (2025), ‘Implication of the Growth in Private Markets’, Financial Stability Report, July; European Central Bank (2025), ‘Box: Private Markets: Risks and Benefits from Financial Diversification in the Euro Area’, Financial Stability Review, May. 2
See FSB (2025), ‘FSB Publishes Recommendations to Address Financial Stability Risks Created by Leverage in Nonbank Financial Intermediation’, Press Release No 13/2025, 9 July. 3
See, for example, Norges Bank (2025), Financial Stability Report H1, May; Sveriges Riksbank (2025), Financial Stability Report, May; Swiss National Bank (2025), Financial Stability Report 2025, June. 4
The Basel Committee on Banking Supervision’s post-2023 liquidity work program highlights the need to recalibrate liquidity requirements in light of increased digitalisation and to subject them to regular stress testing. The report also underscores the importance of banks’ operational readiness to access central bank liquidity facilities. In response, several central banks in advanced economies are exploring ways to improve the availability of these facilities and reduce the stigma associated with their use. See BIS (2024), ‘The 2023 Banking Turmoil and Liquidity Risk: A Progress Report’, October. 5
Consumer and CRE lending represent a relatively small share of total bank lending in advanced economies. For example, consumer lending typically accounts for less than 20 per cent of lending to households and much less in Australia. 6
FSB (2025), ‘FSB Chair’s Letter to G20 Finance Ministers and Central Bank Governors’, 14 July. 7
There was a temporary decoupling of some historical asset correlations in April: alongside strained market liquidity and sharp falls in the value of risky assets, long-term yields on US Treasuries rose and the US dollar weakened. This was in contrast to previous episodes of market stress, when yields on government bonds typically decreased to reflect higher demand from investors for safe-haven assets, and the US dollar typically strengthened reflecting its role as the global reserve currency. In addition, yields on euro area sovereign bonds (such as German bunds) declined, indicating a flight to alternative safe haven assets during this period. While short-lived, the decoupling was likely driven by some market participants reducing long US asset positions and an increase in hedging of US dollar exposures, reflecting concerns about US trade policies and their effects on the US economy. 8
IMF (2025), ‘Fiscal Monitor: Fiscal Policy under Uncertainty’, Report, April. 9
These supply pressures are also reflected in a range of other market indicators, including the compression of interest rate swap spreads, which have turned increasingly negative in response to rising yields. See Aquilina M, A Schrimpf, V Sushko and D Xia (2024), ‘Negative Interest Rate Swap Spreads Signal Pressure in Government Debt Absorption’, BIS Quarterly Review, December. 10
Teichholtz C (2025), ‘Update on the Structure of US Treasury Debt from a Model’s Perspective’, Brookings Institution Research. 11
OECD (2025), ‘Global Debt Report 2025: Financing Growth in a Challenging Debt Market Environment’, March. 12
Fang X, B Hardy and K Lewis (2025), ‘Who Holds Sovereign Debt and Why It Matters’, Review of Financial Studies, 38(8), pp 2,326–2,361. 13
US Department of the Treasury (2024), ‘Considerations for T-bill Issuance’, July. 14
US Department of the Treasury (2025), ‘Developments in Central Clearing in the US Treasury Market’, February. 15
Federal Reserve (2025), ‘Statement on Enhanced Supplementary Leverage Ratio Proposal by Governor Michael S Barr’, Press Release, 25 June. 16
RBA (2025), ‘4.2 Focus Topic: Looking at Digitalisation through a Financial Stability Lens’, Financial Stability Review, April. 17
For further details on the Crowdstrike incident, see RBA (2024), ‘Box: Recent Operational Incidents at Third Parties’, Financial Stability Review, September. 18
See, for example, Federal Reserve Board (2025), Financial Stability Report, April; European Central Bank (2025), Financial Stability Review, May. 19
See, for example, FSB (2025), ‘FSB Work Programme for 2025’, January; Council of Financial Regulators (2025), ‘Quarterly Statement by the Council of Financial Regulators – September 2025’, Media Release No 2025-06, 2 September. 20
Some commentators have suggested that NPL ratios in China are under-reported. See, for example, Charoenwong B, M Miao and T Ruan (2025), ‘Non-Performing Loan Disposals Without Resolution’, Management Science, 71(1), pp 898–916. 21
For further detail regarding the local government debt-swap program, see Baird A, S Nightingale and G Taylor (2025), ‘Behind The Great Wall: China’s Post-pandemic Policy Priorities’, RBA Bulletin, January. 22