Fiscal threats in a changing global financial system

Lecture by Mr Pablo Hernández de Cos, General Manager of the BIS, London School of Economics, London, 27 November 2025.

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.

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The views expressed here are my own and not necessarily those of the BIS or its member institutions.