Share of respondents (%) Source World Economic Forum Global Risks Perception Survey 2025-2026Risk categories Economic Environmental Geopolitical Societal TechnologicalTop risks addressed by Financial instruments (insurance, catastrophe bonds, public-risk pools), 2026–2036FIGURE 41 "Which approach(es) do you expect to have the most potential for driving action on risk reduction and preparedness over the next 10 years?" Financial instruments (e.g. insurance, catastrophe bonds, public risk pools)this scenario. With political and national security considerations dominating economic policy-making, central banks could see their role shifting away from a narrow focus on inflation targeting (and in some cases ensuring labour-market stability) and towards prioritizing government financing. This would be associated with significant risks, as central-bank independence is correlated with better economic outcomes, including significantly reducing inflation in the long run.74 In one scenario, tensions between governments and central bankers would mount. In another, should central banks capitulate, the current generation of financial market participants - having grown accustomed to a world with independent central banks, particularly in advanced economies - would have to recalibrate their thinking around monetary policy, shaking confidence and economic fundamentals. Such fundamental change is likely to be associated with bouts of financial volatility as market participants price in the changing policy outlook. Over time, likely pursuit of debt monetization by more politically beholden central banks would heighten the risk of sustained inflation, eroding real incomes and leading to deeper inequality and societal polarization. Actions for today To boost long-term economic growth, governments will need to exercise fiscal prudence and prioritize more efficient spending, as well as enact structural reforms to boost productivity and growth.75 At the same time, taxation adjustments to generate revenues have already been implemented across many countries. More such measures are likely to be needed in the coming years to help address high debt levels and emerging expenditure needs, including for security and defence, healthcare and social benefits, and climate change-related spending. 76 For low-income countries facing liquidity challenges related to heavy debt burdens, more and better concessional finance,77 as well as other innovative financial instruments supported by multilateral institutions will remain critically important. The GRPS finds that Debt is the leading risk that can be addressed by Financial instruments (Figure 41) One such mechanism is Debt-for-Development Swaps, financial instruments that allow debt- encumbered nations to convert sovereign debt into structured investments in critical economic sectors. The Global Hub on Debt for Development Swaps was launched at the Fourth International Conference on Financing for Development in 2025, with the aim of enhancing access to debt swaps and improving their design and execution.78 Governments can also take measures to make their banking systems more attractive and by extension more resilient in the face of potential future global debt or broader financial crises. These include measures to decrease the proportion of citizens who are unbanked or enabling faster and more efficient payments. India’s Unified Payments Interface provides a good example. Access can also be improved by upgrading payment infrastructure, as in the case of Mexico’s Electronic Interbank Payments System.79 Global Risks Report 2026 45