The Iran war and disruption along the Straits of Hormuz have become the dominant macro variables for global finance. In a single week the International Monetary Fund (IMF) cut its 2026 forecasts, the Financial Stability Board (FSB) flagged converging stresses in non-bank finance, US banks posted record first-quarter (Q1) results with cautious guidance, Hong Kong and Tokyo moved on digital assets and eurozone supervision shifted hands.

Read more on the week's key developments:

1. IMF cuts 2026 global growth forecast as Iran war reshapes macro outlook

On 14 April, at the IMF-World Bank Spring Meetings in Washington, the IMF cut its 2026 global growth forecast to 3.1% from 3.3% in January, and raised inflation to 4.4%. Middle East and North Africa was cut 2.8 points to 1.1%. A severe scenario, with energy disruption extending into 2027, takes global growth to 2%. The planning assumption of a resilient soft landing no longer holds. Banks need to recalibrate 2026 capital, credit and liquidity stress tests to a higher-inflation, lower-growth, wider-dispersion environment.

2. FSB Chair warns G20 of converging private credit, sovereign bond and funding risks

Ahead of the G20 finance ministers' meeting on 16 April, FSB Chair and Bank of England Governor Andrew Bailey warned of a possible "double or triple whammy" in which war-driven volatility, tighter funding and stresses in non-bank financial intermediation reinforce each other. The FSB identified sovereign bond markets, asset valuations and private credit as priority risks. Supervisory questions on prime brokerage, fund financing and non-bank linkages will move from framework level to counterparty level through the 2026 review cycle.

3. Wall Street Q1: record trading and advisory on geopolitical volatility

Record revenues at Goldman Sachs ($17.23 billion) and Morgan Stanley ($20.6 billion) reflect a lucrative backdrop for macro desks, with JPMorgan fixed income trading surging 21% to $7.08 billion. However, this "volatility windfall" masks a defensive pivot to secondary markets as war risks and high rates stifle M&A and primary deal flow. While advisory saw a tactical bounce, up 89% at Goldman, the central tension for 2026 remains whether these trading gains can offset the accelerating slowdown in core investment banking and rising credit provisions.

4. Federal Reserve demands bank-level private credit exposure data

The Federal Reserve has requested major US banks provide detailed disclosures of their exposures to private credit funds, business development companies and collateralised loan obligations. The move follows rising volatility and troubled loans in the non-bank sector. With US bank lending to non-depository financial institutions reaching $1.4 trillion (11% of total loans), the Fed is shifting toward granular, counterparty-level oversight to manage systemic risks.

5. European Central Bank issues opinion on EU settlement finality and supervisory reform

On 9 April, the European Central Bank (ECB) issued its opinion on the European Commission's proposed Settlement Finality Regulation and supervisory reform package, accepting expanded direct supervisory powers for the European Securities and Markets Authority (ESMA) and flagging funding and coordination concerns. On 16 April, François-Louis Michaud was confirmed as Chair of the European Banking Authority (EBA). The architecture of EU financial supervision is consolidating centrally. Cross-border banks should expect tighter direct supervision, particularly on market infrastructure and digital asset activity.

6. Bank of England PRA publishes 2026/27 Business Plan and tightens resolution framework

On 17 April, the Prudential Regulation Authority (PRA) published its 2026/27 Business Plan, setting out priorities for the coming year. Earlier, in March, the PRA issued final policy statements on operational resilience (PS7/26), resolution planning (PS9/26 and PS10/26) and Pillar 3 disclosure (PS11/26), and consulted on modernising the liquidity framework to require faster asset monetisation under stress. UK banks face higher expectations on resolvability evidence, third-party dependency reporting and liquidity stress response through 2026.

7. Hong Kong places regulated stablecoins inside the banking perimeter

On 10 April, the Hong Kong Monetary Authority (HKMA) granted Hong Kong's first stablecoin issuer licences under the Stablecoins Ordinance to HSBC and Anchorpoint Financial, a joint venture of Standard Chartered Bank (Hong Kong), HKT and Animoca Brands. The HKMA assessed 36 applications. HSBC plans a Hong Kong dollar-denominated stablecoin in the second-half of 2026, integrated into PayMe and its mobile banking app. By licensing note-issuing banks first, the HKMA has embedded regulated stablecoins inside the banking perimeter rather than alongside it.

8. Japan moves to reclassify crypto as financial products under securities law

The Japanese Cabinet approved a bill to amend the Financial Instruments and Exchange Act, reclassifying crypto assets as financial products. The move integrates crypto into the securities law framework, introducing a statutory insider trading ban and stricter market abuse rules. For Japanese banks and broker-dealers, the amendment mandates enhanced disclosure and conduct standards, providing a formal regulatory foundation to expand institutional-grade custody and brokerage services under FSA oversight.

9. Gulf central banks release liquidity and capital buffers to absorb Iran war shock

Central banks in the UAE, Kuwait and Qatar have deployed emergency liquidity and capital relief for the banking sector. The CBUAE allows banks to access 30% of cash reserves, while Kuwait and Qatar have lowered Liquidity Coverage (LCR) and Net Stable Funding (NSFR) ratios to 80%. With GCC banks holding average Tier 1 capital above 17% and robust provisioning, regulators are prioritising lending flexibility as macro assumptions for 2026 undergo revision.

10. IMF downgrades Africa 2026 growth as war, aid cuts and debt compress fiscal space

During the IMF-World Bank Spring Meetings, the IMF cut Africa's 2026 real GDP forecast to 4.2% from 4.5%. South Africa was revised to 1.0%, below Russia and the lowest among emerging markets and developing economies covered. Nigeria was revised to 4.1%, Egypt to 4.2%. Sub-Saharan median inflation is projected to rise from 3.4% to 5% in 2026. Bilateral aid cuts of 16-28% continue. Revenue quality assumptions built on 2025 rate and FX tailwinds face a sharply tougher macro. Oil-exporter and importer franchises will diverge materially.

What to watch: Bank of Japan policy meeting on 27-28 April, US regional bank Q1 earnings and continued G20 follow-up on private credit transparency.

The Asian Banker Weekly Brief is a roundup of the biggest macroeconomic, industry and regulatory developments affecting banking globally.