Hard power and defence spending with the IMF

There is a growing water crisis on multiple fronts. In early 2026, United Nations scientists declared an era of global water bankruptcy as systems hit breaking point. The social and health implications of this are widely understood, but the economic and financial risks are too often missing from the conversation. A new report by WWF finds that, when climate and nature risks are considered separately, without fully integrating freshwater considerations, important systemic risks can be overlooked and gaps in risk management can build up. In this episode, Carolin Carella, research lead at the WWF Greening Financial Regulation Initiative, and Jessica Smith, head of nature at the UN Environment Programme Finance Initiative, join Sarah Moloney, editorial director at OMFIF. They examine the key findings of the report and consider what financial institutions, supervisors and regulators can do to help ensure a financially resilient and water-secure future. Read the WWF report, ‘Navigating towards water resilience’, which highlights the materiality of water insecurity to price and financial stability and the possible steps for central banks and financial supervisors to address water-related risks in their work, and the UNEP FI Risk Centre's flagship report, ‘The landscape of sustainability risk integration’, which assessed the extent to which sustainability risks are being integrated by the global banking sector.

While diversification remains a priority, economic fundamentals are once again taking precedence in investment decisions as central banks navigate a more fragmented global landscape. Max Castelli, head of strategy for sovereign institutions, and Philipp Salman, director of strategy for sovereign institutions at UBS Asset Management, join Yara Aziz, senior economist at OMFIF, to unpack the main takeaways from UBS’ 32nd Reserve Management Seminar. They discuss why economic fundamentals are returning to the centre of reserve management, what geopolitics means for investors, and how central banks are thinking about diversification, the dollar and gold.

Rapid digitalisation, the declining use of cash and the growing influence of non-European payment providers have prompted European policy-makers to reconsider the future of money and payments. In the face of growing geopolitical tensions, the European Central Bank's exploration of a digital euro encompasses a wider effort to ensure that Europe retains control over critical payment infrastructure. Joachim Nagel, president of the Deutsche Bundesbank, joins John Orchard, chairman of OMFIF’s Digital Monetary Institute to discuss financial sovereignty, the future of the European Central Bank and strategic autonomy in payments.

Long-standing assumptions about globalisation, multilateral co-operation and financial stability are increasingly being challenged, raising questions about whether the institutions designed to support prosperity are still fit for purpose. Mark Sobel, vice chair and chief economist at OMFIF, is joined by Eswar Prasad, economist and author of The Doom Loop: Why the World Economic Order Is Spiraling Into Disorder. They discuss the central thesis of the book – how globalisation, inequality and institutions like the International Monetary Fund have created a destructive feedback loop, destabilising the world order.

As governments across Europe and beyond commit to significantly higher defence spending, a critical question is coming into focus: how can these ambitions be financed sustainably? In the final instalment of the ‘Hard power’ series on defence, Mark Sobel, vice chair at OMFIF, is joined by Andrea Presbitero, economist at the International Monetary Fund. They discuss what rising military expenditure means for public finances and economic growth as well as the trade-offs facing governments – from advanced and emerging markets – already grappling with constrained budgets. 

With tokenisation taking hold of capital markets, the platforms offering the services are actively shaping the infrastructure and the future of the marketplace. Mark Rakhmilevich, vice president, product management and development at Oracle, joins Lewis McLellan, head of content at OMFIF’s Digital Monetary Institute, to discuss the way tokenisation is developing in capital markets and the ways in which artificial intelligence can support it, giving regulators and market participants comfort in their ability to scrutinise transactions.

Gold has re-emerged as a focal point in the global financial system. Against shifting trade dynamics, elevated public debt and questions over the future trajectory of the dollar-based monetary order, central banks are accumulating gold at a pace not seen in decades. At the same time, investors are reassessing the role of the precious metal as a hedge against inflation, market volatility and systemic risk. David Marsh, chairman of OMFIF, is joined by Willem Middelkoop, founder of Commodity Discovery Fund and William White, former chief economist at the Bank for International Settlements, to explore gold's evolving place in the international monetary landscape and examine the forces shaping its demand. Ahead of OMFIF’s Gold and Precious Metals working group meetings, which informed the ‘Gold and the new world disorder’ report in 2024, participants hold the metal to the light, inspecting it under newer circumstances.

Artificial intelligence agents are beginning to make their presence felt in online payments. At present, they typically discover options for purchase and present users with buy options. However, many are already looking towards a future where AI agents have wallets and the ability to pay for small items with stablecoins. This could also create the opportunity for machine-to-machine micropayments. Chad Harper, head of the Coinbase Institute, joins Lewis McLellan, head of content at OMFIF’s Digital Monetary Institute, to discuss the rails that will facilitate agentic payments, particularly x402, Coinbase’s payments protocol.

As governments commit to long-term security strategies stretching to 2035, fiscal pressures are arriving much sooner and markets are already responding. What does sustained defence expenditure mean for sovereign debt, borrowing costs and economic priorities? Who ultimately pays, and over what timeline? In the second episode of the ‘Hard power’ series on defence, Udaibir Das, vice chair at OMFIF, is joined by Sarah Carlson, senior vice president of sovereign risk at Moody’s Ratings and Ron Smith, emeritus professor of applied economics at Birkbeck, University of London. Together, they discuss the historical record on defence build-ups and growth; the fiscal arithmetic facing higher-debt sovereigns and whether political ambitions, fiscal realities and market expectations can ultimately be reconciled.

With US legislators mulling the Clarity Act, Europe reopening Markets in Crypto-Assets regulation for public consultation and the UK preparing its own cryptoasset regime, stablecoin policy is rapidly taking shape. Dante Disparte, Circle’s chief strategy officer joins Lewis McLellan, head of content at OMFIF’s Digital Monetary Institute, to break down some of the key policy debates in the stablecoin world.