IMF warns of financial stability risks from geopolitical tensions and shadow banks.

The International Monetary Fund (IMF) has warned that global tensions, particularly between the US and China, could disrupt overseas investment and lead to a long-term loss of 2% of the world's gross domestic product. The IMF pointed to recent bills adopted against the backdrop of rising tensions between the two countries, such as Washington's Chips and Science Act. The rise of "friend-shoring" could hurt less developed markets the most, the organization said. Developing economies are more vulnerable to this shift in foreign direct investment as "they rely more on flows from more geopolitically distant countries."