Lecture by Mr Pablo Hernández de Cos, General Manager of the BIS, London School of Economics, London, 27 November 2025.
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27 Nov 2025
Fiscal threats in a changing global financial system
Mounting public debt and the growing footprint of non-banks have brought new financial stability challenges, says Pablo Hernández de Cos.
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Sovereign debt levels have increased considerably since the Great Financial Crisis, reaching historical post-World War II highs in many advanced economies. This has been accompanied by a growing presence of non-bank financial institutions in sovereign bond markets. This combination generates new financial stability challenges, which have both domestic and international aspects. Policymakers should address these challenges by employing a carefully selected mix of tools that spans fiscal, monetary and prudential policy.
