Systemic financial risks in an era of geopolitical tensions, climate change, and technological disruptions: Predictive analytics, stress testing and crisis response strategies

Systemic financial risks have become increasingly complex and unpredictable due to the interplay of geopolitical tensions, climate change, and rapid technological disruptions. Financial markets and institutions face heightened uncertainty, driven by shifting global power dynamics, trade conflicts, and regulatory changes that impact economic stability. Concurrently, climate-related risks, including extreme weather events, resource depletion, and the transition to sustainable energy, pose long-term threats to financial assets, investment portfolios, and economic resilience. Technological disruptions, particularly those stemming from artificial intelligence, cybersecurity vulnerabilities, and digital financial innovations, further complicate risk management by introducing new vulnerabilities and systemic contagion pathways. In this evolving risk landscape, predictive analytics and stress testing have emerged as essential tools for identifying vulnerabilities, quantifying financial shocks, and developing proactive mitigation strategies. By leveraging machine learning models, big data analysis, and scenario-based forecasting, financial institutions can assess the potential impact of geopolitical instability, environmental shocks, and technological disruptions on financial systems. Additionally, stress testing frameworks enable regulators and policymakers to evaluate the resilience of financial institutions under extreme conditions, ensuring adequate capital buffers and liquidity measures. This research explores how predictive analytics, stress testing, and crisis response strategies can be effectively integrated to enhance financial stability in an era of escalating global uncertainties. It examines case studies of past financial crises, emerging threats, and best practices for mitigating systemic risks. By providing a comprehensive approach to financial risk management, this study contributes to the development of adaptive strategies that safeguard economic stability amid an increasingly volatile global environment.

Authors

Publication Details

Journal
International Journal of Science and Research Archive
Published
2025-02-27
DOI
https://doi.org/10.30574/ijsra.2025.14.2.0563
Citations
26
Primary Topic
Market Dynamics and Volatility
Type
article
Field-Weighted Citation Impact
81.41
Controls
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article

Systemic financial risks in an era of geopolitical tensions, climate change, and technological disruptions: Predictive analytics, stress testing and crisis response strategies

Adriana N Dugbartey
26 citations
International Journal of Science and Research Archive
Market Dynamics and Volatility
81.41
article

Systemic financial risks in an era of geopolitical tensions, climate change, and technological disruptions: Predictive analytics, stress testing and crisis response strategies

Adriana N Dugbartey
article en
26 citations

Abstract

Systemic financial risks have become increasingly complex and unpredictable due to the interplay of geopolitical tensions, climate change, and rapid technological disruptions. Financial markets and institutions face heightened uncertainty, driven by shifting global power dynamics, trade conflicts, and regulatory changes that impact economic stability. Concurrently, climate-related risks, including extreme weather events, resource depletion, and the transition to sustainable energy, pose long-term threats to financial assets, investment portfolios, and economic resilience. Technological disruptions, particularly those stemming from artificial intelligence, cybersecurity vulnerabilities, and digital financial innovations, further complicate risk management by introducing new vulnerabilities and systemic contagion pathways. In this evolving risk landscape, predictive analytics and stress testing have emerged as essential tools for identifying vulnerabilities, quantifying financial shocks, and developing proactive mitigation strategies. By leveraging machine learning models, big data analysis, and scenario-based forecasting, financial institutions can assess the potential impact of geopolitical instability, environmental shocks, and technological disruptions on financial systems. Additionally, stress testing frameworks enable regulators and policymakers to evaluate the resilience of financial institutions under extreme conditions, ensuring adequate capital buffers and liquidity measures. This research explores how predictive analytics, stress testing, and crisis response strategies can be effectively integrated to enhance financial stability in an era of escalating global uncertainties. It examines case studies of past financial crises, emerging threats, and best practices for mitigating systemic risks. By providing a comprehensive approach to financial risk management, this study contributes to the development of adaptive strategies that safeguard economic stability amid an increasingly volatile global environment.

International Journal of Science and Research ArchiveVol. 14(2)
Openalex Percentile: Top 0%
Market Dynamics and Volatility
81.41
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Systemic financial risks in an era of geopolitical tensions, climate change, and technological disruptions: Predictive analytics, stress testing and crisis response strategies — Adriana N Dugbartey · International Journal of Science and Research Archive (2025) | TGRS Research Map | TGRS