The concerns come as central banks around the world furiously tighten monetary policy in their fight to tame inflation, creating an environment investors and policymakers say is fertile ground for episodes of financial instability.

Investors got a taste of the eye-popping volatility such episodes can bring last month, when a blowout in United Kingdom debt reverberated around the world. Though the Bank of England stepped in to stabilize markets, a number of closely-watched indicators such as global demand for dollars and risk aversion in credit markets still show increasing financial stress.

Meanwhile, warnings of more ructions ahead are mounting. This week alone, a gloomy report from the International Monetary Fund flagged risks of “disorderly asset repricings” and “financial market contagions” while JPMorgan chief Jamie Dimon predicted a looming recession. Ray Dalio, founder of Bridgewater, the world’s largest hedge fund, said on Tuesday a “perfect storm” was coming for the United States economy.

Global financial conditions, which reflect the availability of funding, touched their tightest since 2009 in late September, an index compiled by Goldman Sachs showed, lifted by surging interest rates, falling equities and a soaring dollar.

Suzanne Hutchins, investment manager of global funds at Newton Investment Management, said the current environment raised the risk of so-called black swan events, or unforeseen occurrences that typically have extreme consequences.

“We know the market is pretty illiquid at the moment,” she said. “There’s a huge amount of leverage in the financial system and rates are now a lot higher so there’s certainly going to be some casualties out there.”

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