The report, Ranking Systemic Risks and Vulnerabilities, assesses 13 threats by immediacy, potential speed of contagion and the risk of irreversible consequences. The council said each of the four highest-ranked risks could disrupt critical infrastructure or freeze international capital markets within hours.

The council is a private sector, nonpartisan body of former government officials and financial and legal experts, formed in 2012 by the  CFA Institute and The Pew Charitable Trusts, with former FDIC chair Sheila Bair as its first chair. It focuses on the US and Europe and sorts the risks into three tiers. 

Artificial intelligence features heavily. The council identifies separate AI-related vulnerabilities: cyberattacks on financial infrastructure, investment concentration and market bubbles, misinformation and labor market disruption. Benefits and Pensions Monitor reported that the council ranks AI-induced investment concentration and bubbles fourth, warning of a concentrated AI sector supported by circular financing among the dominant providers, related businesses and regulated banks. 

The same report places the build-up of leverage among lightly reporting private credit providers fifth. The council’s main concern there is the growing links between regulated banks and private market and private credit structures, an exposure that matters to wealth managers allocating client capital to the asset class. 

Simon Johnson, co-chair of the council, 2024 Nobel laureate in economics and former chief economist of the International Monetary Fund, said the next crisis may start outside the banking system. “It could begin with a cyberattack on payment systems, a geopolitical confrontation, or the sudden collapse of a crowded investment thesis,” he said. “These threats become much harder to contain when financial safeguards are weakened and exposures are difficult to see.”

Over the medium term, the council flags three further vulnerabilities. It cites reduced capital protections at systemically important banks, alongside rising leverage and limited transparency at nonbank financial institutions. It also points to high structural deficits and rising borrowing costs that could unsettle government bond markets. Its third concern is the growing links between crypto assets, stablecoins and traditional financial institutions, which create new channels for contagion.

Longer-term threats include AI-related job displacement, gradual climate change and pandemics.

The council said the rankings are a qualitative assessment rather than a forecast of whether or when events will occur. The report draws on research from the IMF, the Financial Stability Board, the Bank for International Settlements and the World Economic Forum. Its stated aim is to help regulators, policymakers and market participants decide where to be prepared as risks accumulate and interact.