The next financial crisis may not look like previous ones. It will not necessarily be more serious, but it could sp rapidly, moving from government bonds to investment funds and from social networks to bank accounts in a few hours.
The warning was issued by the Bank for International Settlements (BIS), the institution that promotes cooperation between central banks. A few hours ago, in his speech on the future of financial crises, Director General Pablo Hernández de Cos identified three factors capable of amplifying the next shock: high public debt, the growing weight of non-banking finance and the speed introduced by digitalisation.
This is not a prediction of imminent collapse. Rather, it is a map of the fragilities that could make it more difficult to contain a new phase of instability. And it also directly concerns Italian savers, exposed through BTPs, bond funds, ETFs, bank shares and deposits.
Because public debt complicates crises
The debt of advanced economies is close to the highest levels since the Second World War, while public deficits, an aging population and new strategic investments continue to put pressure on state budgets.
In this context, a rise in yields can depend on two very different causes. Investors could sell securities because they doubt the sustainability of public finances or because a temporary lack of liquidity forces them to reduce positions.
The distinction is crucial. In the second case the central bank can intervene to restore the functioning of the market. In the first, however, it would risk being perceived as an indirect financier of governments.
| Origin of tension | What happens on the market | Problem for the central bank |
|---|---|---|
| Doubts about public finances | Sales of securities and structural increase in yields | An intervention may seem like debt support |
| Poor liquidity | Prices falling even without economic worsening | We need to act quickly but temporarily |
| Forced sales of funds | Ripple effect on bonds and other assets | The shock may extend beyond the initial sector |
| Digital panic | Withdrawals and transfers in just a few hours | Bank liquidity can deteriorate quickly |
For Italy this step is particularly important. When the required yield on Italian bonds rises compared to German ones, the spread between BTPs and Bunds increases, with potential consequences on the cost of new debt and on the prices of bonds already in circulation.
A rise in yields does not automatically mean insolvency. It means, however, that the market demands a higher remuneration for lending money to the State.
The hidden risk in non-banking funds
The second transformation concerns non-bank financial intermediaries: investment funds, pension funds, insurance companies, hedge funds and other structures that raise or manage capital without carrying out normal banking activities.
According to the BIS, these operators have become the largest holders of sovereign debt in advanced economies. The problem is not their presence, which is fundamental for financing businesses and states, but the possible combination of financial leverage, short-term financing and assets that are difficult to sell quickly.
When prices fall, a highly exposed fund may be forced to post new guarantees, so-called margin calls. To obtain the necessary liquidity, it can sell the very securities that are already losing value, accentuating their fall.
It happened during the “liquidity rush” of March 2020 and resurfaced in 2022, when the UK gilt crisis forced the Bank of England to intervene.
BTPs, funds and ETFs do not react in the same way
It is important for the saver to distinguish the instruments, because being all exposed to bonds does not mean having the same risk.
| Instrument | What happens if yields rise | Appearance to check |
|---|---|---|
| BTP held until maturity | The price fluctuates, but nominal reimbursement remains expected unless insolvency | Maturity, purchase price and issuer risk |
| BTP sold before maturity | It can generate a loss if the price has fallen | Future need for liquidity |
| Bond fund | The value can go down and there is no single portfolio maturity | Financial duration, costs and quality of securities |
| Bond ETF | The share varies during the day following the basket | Replicated index, duration and liquidity |
| Corporate bond | In addition to the rates, the solidity of the company matters | Rating, subordination and concentration |
The less intuitive point is that a high return does not erase risk. It often pays off: the more uncertainty the market perceives, the greater the interest investors may require.
How a digital rush for deposits is born
The third vulnerability indicated by the BIS concerns technology. Home banking and smartphones allow you to move large sums without going to a branch. Furthermore, social networks and chats can spread incomplete or false information before a bank or authority is able to respond.
During the banking tensions of 2023, deposits flowed out of some institutions at an unprecedented rate. A crisis of confidence that once would have taken days can now be concentrated in a few hours.
Artificial intelligence also introduces an unknown. If banks, funds and traders use similar models to assess risks, allocate liquidity or issue orders, they may arrive at the same conclusions at the same time. The result would be mass behavior capable of amplifying oscillations, rather than attenuating them.
This does not mean that AI will necessarily cause a crisis. Risk arises when many subjects react in the same way and at the same time.
Accounts and investments: which protections change
Digital speed does not change the guarantees provided for depositors. The Interbank Deposit Protection Fund protects, in established cases, up to 100 thousand euros per depositor and per bank.
The guarantee does not, however, include BTPs, bank bonds, shares, funds and ETFs. These instruments are not deposits: they remain subject to market fluctuations, even when held in a bank.
Before intervening on the portfolio, the saver should therefore check:
- how much liquidity can be needed in the coming months
- how much equity is concentrated in a single issuer
- the actual maturity of the securities
- the sensitivity of funds and ETFs to rates
- the possible presence of financial leverage
- the total deposits held at the same institution.
What is the BIS really saying
The BIS does not invite you to sell BTPs, exit funds or withdraw money from banks. He highlights that the financial system has changed faster than the tools used to stabilize it.
The main vulnerability lies not in a single product, but in the combination of high debt, concentrated positions and speed of reactions. A localized shock can become systemic when everyone seeks liquidity at the same time.
For those who save, the answer is not to chase every alarm. It’s knowing what you have, correctly distributing deadlines and risks and not confusing the ease of selling with the certainty of doing so without losses. In the new financial system, in fact, technology makes money more mobile, but it does not eliminate risk: it can simply make it much faster.
