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Iran conflict has increased financial and energy market volatility: Macklem
The head of the Bank of Canada warns new players in global debt markets aren’t as closely monitored as traditional banks, which could drive new risks in a period rife with uncertainty. Governor Tiff Macklem was in Toronto on Wednesday speaking to the Global Risk Institute about where he sees vulnerabilities in the financial system. The United States’ and Israel’s attacks on Iran have increased volatility in financial and energy markets, he said in prepared remarks, particularly with a lack of clarity around how long the conflict could last. He said later in a question-and-answer period that the energy price ... (full story)
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Good morning. It’s a pleasure to be here—and it’s great to see such an impressive mix of market participants, policy-makers and practitioners. I’m looking forward to the fireside chat, so I’ll keep my remarks short to leave time for discussion. Conversations like this matter—especially when uncertainty is high and we’re all trying to manage the risks. As we speak, the actions taken against Iran by Israel and the United States have increased volatility in energy and financial markets and there is considerable uncertainty about the duration and fallout of this conflict. My focus today will be on some longer-term changes we’re seeing in the financial system. And I’m here today wearing two hats: as Governor of the Bank of Canada and as Chair of the Financial Stability Board’s Standing Committee on Assessment of Vulnerabilities (FSB SCAV). SCAV’s role isn’t to predict the next financial crisis or prescribe policy. It’s to step back and connect the dots across markets and jurisdictions to identify the systemic vulnerabilities. The goal is to understand the pressure points so they don’t become fractures. The global reach of the FSB complements the work of domestic central banks and regulators. It also complements the work of the private sector. Market participants manage the risks they face individually. But systemic risks can build beyond the sight line of any single firm. We all have a stake in a well-functioning financial system that channels savings into productive investments and helps households and businesses manage their risks. But to work well, the financial system needs a competitive marketplace with clear rules and good information. And because money moves across borders, the perspective needs to be global, with a degree of international coordination. 
Identifying pressure points in a changing financial system The rise of non-bank players, like hedge funds and private credit, in the global financial system has brought clear benefits by adding liquidity and flexibility to debt markets. But the shift away from the regulated banking sector has also increased risks to financial stability. Most investment firms do a good job of managing their own risks, but they can’t see dangers building across markets and borders. The Financial Stability Board, a global body, helps connect the dots to identify systemic vulnerabilities through its Standing Committee on Assessment of Vulnerabilities (SCAV). Today’s economic landscape has increased the urgency of this work: Just in | Bank of Canada Governor Macklem warns that the increasing risks from non-bank entities in global debt markets may be outpacing our capacity to comprehend and address them. Just in | Bank of Canada Governor Macklem expresses concern over potential market shocks that could increase interest rate volatility.
Identifying pressure points in a changing financial system The rise of non-bank players, like hedge funds and private credit, in the global financial system has brought clear benefits by adding liquidity and flexibility to debt markets. But the shift away from the regulated banking sector has also increased risks to financial stability. Most investment firms do a good job of managing their own risks, but they can’t see dangers building across markets and borders. The Financial Stability Board, a global body, helps connect the dots to identify systemic vulnerabilities through its Standing Committee on Assessment of Vulnerabilities (SCAV). Today’s economic landscape has increased the urgency of this work: Just in | Bank of Canada Governor Macklem warns that the increasing risks from non-bank entities in global debt markets may be outpacing our capacity to comprehend and address them. Just in | Bank of Canada Governor Macklem expresses concern over potential market shocks that could increase interest rate volatility.
From forex.com | Mar 5, 2026
Developments in the Middle East are undoubtedly top of traders’ minds at the moment, but that doesn’t mean we should ignore “Tier 1” economic reports, and the most important jobs report from the world’s largest economy certainly fits that bill. Last month brought a stronger-than-expected reading on the US labor market, with jobs rising +130K in January, the ...
