ContextInterview with Pablo Hernández de Cos, General Manager of the BIS, with India's Economic Times, conducted by Deepshikha Sikarwar, 11 September 2026.
Why it mattersThe BIS General Manager's view of the world economy in one interview: repeated supply shocks, fragmented AI rules and the reach of dollar stablecoins.
- Repeated supply shocks lower growth and raise inflation at the same time.
- Uncoordinated national rules on AI could fragment the system.
- Dollar stablecoins threaten the monetary sovereignty of emerging economies.
- Build geopolitical risks and supply shocks into policy strategies.
- Coordinate AI regulation globally to limit cross-border risks.
- Handle stablecoin risks through international cooperation.
Read the speech summary
1. A world of repeated supply shocks
In an interview during a visit to Mumbai, BIS General Manager Pablo Hernández de Cos said recent central-bank strategy reviews share one conclusion: geopolitical tension and supply disruptions have become more probable. Over six years the world has absorbed the pandemic, the war in Ukraine, tariffs and now conflict in the Middle East. Such shocks push growth down and inflation up, so central banks must look at medium-run effects, stay focused on price stability and watch second-round effects on core inflation and expectations, while recognising they cannot solve everything alone. Growth has so far held up, helped by AI investment and exports. For resilience he sees a three-step approach: inventories in the short run, diversification of suppliers in the medium run, and technology, such as alternative energy sources, in the long run.
2. An AI boom that may not last
He warned that AI investment shows signs of becoming unsustainable, for two reasons: a race for market share breeds overinvestment, and spending increasingly relies on debt and leverage, including murky private lending vehicles and circular financing. A bust matters because AI has been a main pillar of recent resilience, supporting investment, wealth-driven consumption (notably in the US) and exports in some Asian economies; a reversal could hit all three, amplified by financial channels. On jobs, AI can complement or replace work depending on the task and sector, so retraining and active labour-market policies are essential, especially in developing economies.
3. Cooperation, cyber and regulation
On access to frontier technology, scale economies point to concentration in a few countries and firms, so global cooperation is needed to spread the benefits, and because financial stability is a global public good. AI-enabled cyber capabilities help defenders and attackers alike, and an incident can spread across borders, so coordination is the only effective response. He judged the bigger regulatory danger to be divergence between countries rather than slowness, and held up India's work on fast payments and data privacy as a good example.
4. Stablecoins and tokenisation
Stablecoins fall short of what money needs: exchange one-for-one with central-bank money cannot be assured when crises hit, and worries about integrity, fragmentation and interoperability remain. Because they are mostly dollar-based, wide adoption could threaten emerging economies' monetary sovereignty; the answers are international coordination on rules and, at home, good policy that builds trust. He backs two paths: tighter stablecoin regulation, and tokenisation inside the traditional two-tier system, with tokenised bank deposits and central-bank reserves. Project Agorá, on wholesale cross-border payments, now enters its second phase.