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Systems in depth

One section per system: its state at evidence close, its exposures and what the operational series will watch.

8 min read0 figures5 tables15 notesNR-SECTOR-FINANCE-GLOBAL-2026-BASELINE

Contents
  1. ·Edition home
  2. ·Executive summary
  3. 1Finance is where shocks are priced
  4. 2Key findings
  5. 3Systems and sectors at baseline
  6. 4Risks and capability
  7. 5Sovereign bond repricing under inflation and thin fiscal space
  8. 6Readings from the other desks
  9. 7The 2027 agenda
  10. 8Systems in depth
    1. 8.1 Finance and prices
    2. 8.2 Finance and food
    3. 8.3 Finance and health
    4. 8.4 Finance and nature
    5. 8.5 Financial stability, payments and rules
  11. AMethodology
  12. BData appendix
  13. CReferences and record
  14. ·Complete edition, for print

8.1Finance and prices

Prices set by physical shocks reach finance through inflation, policy rates, import bills and fiscal relief. The 2026 Middle East conflict showed all four channels at once.

2.50%

euro area deposit facility rate from 16 September 202619

3.7%

US headline inflation in September 20266

70basis points

rise in US high-yield spreads since the start of September 20266

Table 8.1State at baseline
ComponentStateEvidenceStatus
Policy rateseuro area deposit facility rate raised from 2.00% to 2.25% on 17 June and to 2.50% on 16 September 202619Reported
InflationUS headline inflation rose to 3.7% in September 2026 from 3.4% in August6Reported
Bond yieldslong-term yields in France, Germany, Japan, the United Kingdom and the United States reached their highest in more than a decade after late September6Reported
Fiscal reliefdeficits in 2027 projected at or above 2025 levels in most jurisdictions1Scenario

Couplings

  • ENE → FIN prices and rates
  • TRD → FIN import bills
  • FIN → FIN yields and funding

Evidence to bind in 2027

  • yield levels at the evidence close
  • euro area inflation after December 2025

Related editions

  • GLB Global Systems
  • GS-03 Food and Agrifood Systems
  • GS-04 Health and One Health
  • GS-06 Development and Humanitarian
  • GS-11 Biodiversity and Ecosystems
  • SR-05 Sovereign, Fiscal and Financial Resilience

8.2Finance and food

Food depends on credit, inputs and trade finance. Input prices and currency moves pass through to food prices, and weak currencies raise the cost of imports.

136.0points

FAO Food Price Index, September 202625

50%

rise in fertiliser prices after the conflict began1

30%

rise in plastics prices after the conflict began1

Table 8.2State at baseline
ComponentStateEvidenceStatus
Food pricesthe index was 5.8% above a year earlier and 15.1% below its March 2022 peak25Reported
Input costsfertiliser prices up 50% and plastics up 30%1Reported
Wheat and maizewheat at its highest since August 2023 and maize at a three-year high in September 202625Reported
Farm creditnot consolidated here6Expert input

Couplings

  • ENE → FOO → FIN input costs
  • FIN → FOO currency and credit
  • TRD → FOO shipping and trade finance

Evidence to bind in 2027

  • farm credit conditions by region
  • food import bills by country group

Related editions

  • GLB Global Systems
  • GS-03 Food and Agrifood Systems
  • GS-04 Health and One Health
  • GS-06 Development and Humanitarian
  • GS-11 Biodiversity and Ecosystems
  • SR-05 Sovereign, Fiscal and Financial Resilience

8.3Finance and health

Public health budgets compete with interest. Evidence from debt statistics and from case studies shows how borrowing costs, austerity and external debt can reach health.

65%

of Africa’s population in countries spending more on interest than on health or education, 202310

43%

rise in infant mortality in Greece against a synthetic counterfactual after 201032

854deaths

estimated excess infant deaths in Greece, 2010 to 202032

Table 8.3State at baseline
ComponentStateEvidenceStatus
Interest versus health51 developing countries spend more on interest than on either health or education10Reported
External debt and health budgetsin Senegal debt obligations constrained the government budget including health spending31Reported
Austerity and infant mortalitya synthetic-control study finds an average 43% rise after the 2010 adjustment programme in Greece32Reported
Household shock absorption56% of adults could reliably access emergency money in 20248Reported

Couplings

  • FIN → HLT budgets and interest
  • FOO → HLT household budgets
  • ENE → HLT clinic and household costs

Evidence to bind in 2027

  • health spending outcomes by country
  • household debt service by country

Related editions

  • GLB Global Systems
  • GS-03 Food and Agrifood Systems
  • GS-04 Health and One Health
  • GS-06 Development and Humanitarian
  • GS-11 Biodiversity and Ecosystems
  • SR-05 Sovereign, Fiscal and Financial Resilience

8.4Finance and nature

Nature supplies the ecosystem services that underpin output and tax revenue. Sovereign credit assessments do not yet price their loss, and investment flows to sustainable sectors remain uneven.

83USD trillion

sovereign debt assets that may be mispriced, in the study30

162USD billion

extra annual interest across 23 countries in the scenario30

2.7%

of global foreign direct investment received by least developed countries, 20259

Table 8.4State at baseline
ComponentStateEvidenceStatus
Sovereign creditratings omit biodiversity and ecosystem service risk in the study’s reading30Scenario
Scenario costpartial ecosystem collapse adds USD 49 billion a year in India and USD 70 billion in China30Scenario
Sustainable-sector investmentinvestment related to the Sustainable Development Goals picked up in 2025 while renewable greenfield values fell9Reported
Climate-related financeinsured loss and scenario series were not opened38Expert input

Couplings

  • BIO → FIN sovereign credit
  • FIN → BIO land-use finance
  • CLI → FIN disaster losses

Evidence to bind in 2027

Related editions

  • GLB Global Systems
  • GS-03 Food and Agrifood Systems
  • GS-04 Health and One Health
  • GS-06 Development and Humanitarian
  • GS-11 Biodiversity and Ecosystems
  • SR-05 Sovereign, Fiscal and Financial Resilience

8.5Financial stability, payments and rules

Stability now depends on how banks, non-banks and payment systems interact. Leverage, settlement risk and the pace of rule adoption are the three channels the 2025 and 2026 evidence shows.

53%

non-bank share of advanced-economy sovereign debt, 20251

47%

of member jurisdictions with final Basel III fully implemented, September 202622

1.4USD trillion

daily FX settlement settled gross bilaterally, April 202512

Table 8.5State at baseline
ComponentStateEvidenceStatus
Non-bank leveragehedge fund leverage near record highs and concentrated in a small number of large funds17Reported
Settlement risk36% settled through payment versus payment; 10% settled gross bilaterally12Reported
Prudential rulesfinal Basel III implementation complete in 47% of member jurisdictions; nearly complete by the first half of 202722Reported
Resolution fundingabout half of jurisdictions with material gaps in public sector backstops15Reported

Couplings

  • FIN → INF funding and settlement
  • AIC → FIN valuations
  • DAT → FIN supervision data

Evidence to bind in 2027

  • private credit exposure
  • cross-border payment progress

Related editions

  • GLB Global Systems
  • GS-03 Food and Agrifood Systems
  • GS-04 Health and One Health
  • GS-06 Development and Humanitarian
  • GS-11 Biodiversity and Ecosystems
  • SR-05 Sovereign, Fiscal and Financial Resilience

Notes

Numbers are the edition’s reference numbers, so a note reads the same in every chapter. The full list, with every source and its licence, is in Annex C. Annex C, references

  1. 19European Central Bank (ed.), ECB Data Portal, key interest rates (deposit facility rate and main refinancing operations rate, dates of change to 16 September 2026; harmonised index series), retrieved through the ECB data service. ECB, Frankfurt. Observation year 2026. Accessed 2026-11-03.back
  2. 6POST-CLOSE, context only: World Bank (ed.), Global Monthly, October 2026 (global financial conditions, commodity and activity notes; data to 23 October 2026); released after the 30 September evidence close and cited as the position at access. World Bank, Washington. Observation year 2026. Accessed 2026-11-03.back
  3. 1Bank for International Settlements (ed.), Annual Economic Report 2026: From resilience to robustness? (chapters I to III), Basel, 28 June 2026. BIS, Basel. Observation year 2025 (with events of early 2026). Accessed 2026-11-03.back
  4. 25Food and Agriculture Organization of the United Nations (ed.), FAO Food Price Index, release for September 2026. FAO, Rome. Observation year 2026. Accessed 2026-11-03.back
  5. 10UNCTAD (ed.), A World of Debt 2026: Rising debt costs and stalling development (report page with key statistics; the full report and data file were not opened). United Nations Trade and Development, Geneva. Observation year 2025 (regional shares 2023; the year of the 51-country and 3.7 billion people counts is not stated on the page). Accessed 2026-11-03.back
  6. 32Kolesar, R.J. and Spruk, R., Effect of Austerity Measures on Infant Mortality: Evidence From Greece, Health Economics 35, 2026 (open-access full text read through the PubMed Central service). John Wiley and Sons. Observation year 2020 (study period 2010 to 2020). Accessed 2026-11-03.back
  7. 31Federspiel, F., Borghi, J., Tarp Jensen, H., Mbaye, E.M. et al., Influence of public external debt on government health expenditure: a mixed-methods case study of Senegal, PLOS Global Public Health 6, 2026 (open-access full text read through the PubMed Central service). Public Library of Science. Observation year 2023 (debt and health statistics 1970 to 2023; interviews 2019 to 2020). Accessed 2026-11-03.back
  8. 8World Bank (ed.), The Global Findex Database 2025 (landing page and summary statements: account ownership, savings, emergency funds, disaster exposure). World Bank, Washington. Observation year 2024. Accessed 2026-11-03.back
  9. 30Agarwala, M., Burke, M., Klusak, P., Kraemer, M., Volz, U. et al., Biodiversity loss will decrease the future creditworthiness of nations, Nature Ecology and Evolution 10, 2026 (open-access full text read through the PubMed Central service). Springer Nature. Observation year 2026. Accessed 2026-11-03.back
  10. 9UNCTAD (ed.), World Investment Report 2026: overview (PDF, 7 July 2026). United Nations Trade and Development, Geneva. Observation year 2025. Accessed 2026-11-03.back
  11. 38UNVERIFIED, not opened: Network for Greening the Financial System (ed.), NGFS climate scenarios for central banks and supervisors; the publisher page returned access denied and no figure from it is used. NGFS, Paris. Observation year 2025. Accessed 2026-11-03.back
  12. 22Basel Committee on Banking Supervision (ed.), Basel III implementation: adoption status of the standards as of 30 September 2026 (implementation page). BIS, Basel. Observation year 2026. Accessed 2026-11-03.back
  13. 12Bank for International Settlements (ed.), BIS Quarterly Review, June 2026 (article: Uncovering FX settlement risk, new measures from the 2025 BIS Triennial Survey). BIS, Basel. Observation year 2025 (April survey). Accessed 2026-11-03.back
  14. 17Board of Governors of the Federal Reserve System (ed.), Financial Stability Report, May 2026 (overview and leverage sections; data as of 23 April 2026). Federal Reserve Board, Washington. Observation year 2025 (fourth-quarter data). Accessed 2026-11-03.back
  15. 15POST-CLOSE, context only: Financial Stability Board (ed.), Public sector backstop funding: peer review of jurisdictions, October 2026 (publication page; the report was not opened); released after the 30 September evidence close. FSB, Basel. Observation year 2026. Accessed 2026-11-03.back

Cite this chapter

Valadbaygi, S. (Ed.). (2026). Chapter 8: Systems in depth. In Global Finance and Economy Risk and Resilience Report 2026: Baseline Edition, The State of the World’s Financial and Economic System. (Baseline Edition 2026, Report No. NR-SECTOR-FINANCE-GLOBAL-2026-BASELINE) [Draft under review]. The Global Centre for Risk and Innovation (GCRI).

Every citation form of the whole report, BibTeX and RIS included, is on the edition home. Cite this report

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