G20 Watchdog Warns Soaring Asset Prices Could Trigger Market Crash

The Financial Stability Board (FSB) has cautioned that the sharp rise in global equity and asset prices has increased the risk of a sudden downturn, as fragile economic conditions and heightened geopolitical uncertainty leave markets vulnerable to a crash.

In a letter to G20 finance ministers dated October 8, FSB Chair Andrew Bailey stressed that multilateral cooperation is essential not only to prevent future crises but also to underpin sustainable 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 said.

The warning comes shortly after U.S. President Donald Trump threatened “massive” new tariffs on China in response to Beijing’s tightening of rare earth export rules—an announcement that triggered the steepest drop on Wall Street in nearly six months.

Bailey also flagged the continued rise in sovereign debt levels as a key concern, emphasizing that structural vulnerabilities within the global financial system remain significant.

“The need for global standards and cooperation therefore remains abundantly clear,” the letter said.

Bailey noted that the FSB, which brings together central banks and regulators from G20 economies, will “pivot” its approach by shifting from policy development toward monitoring and ensuring the implementation of agreed global reforms that are still incomplete.

“The effectiveness of these measures depends on their timely, consistent and comprehensive implementation across all jurisdictions,” he said.

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