WEF issues GLOBAL financial crash warning on TWO huge world powers
THE fragile global economy is at risk of a crippling crisis, sparked by huge debt bubbles in China and India and a vulnerable banking system, the World Economic Forum (WEF) has warned.
By LANA CLEMENT
Express.co.uk
Wed, Sep 27, 2017
It’s just a decade since the financial system was brought to its knees by risky lending.
Yet China’s debt has ballooned to sky-high levels, in a worrying echo of the United States before the 2007-08 crisis, according to the respected WEF.
At the same time, bad loans in India have doubled.
Worse still, the global banking system is in worse shape than it was in the lead up to the last financial crisis, the WEF said in its Global Competitiveness Report.
It said: “In general, there is still too much debt in parts of the private sector, and top global banks are still ‘too big to fail’.”
“The largest 30 banks hold almost $43trillion in assets, compared to less than $30trn in 2006, and concentration is continuing to increase in the US, China, and some European countries.
“In Europe, banks are still grappling with the consequences of 10 years of low growth and the enduring non-performance of loans in many countries.”
The Bank of England and the International Monetary Fund (IMF) have both raised the alarm over China’s debt levels and said the boom threatens financial stability.
Stock markets last year plunged amid concerns growth in the world’s second largest economy could crash.
The WEF also said Donald Trump’s plans to cutback financial regulation could put the banking system at greater risk, while eurozone banks are still feeling the effects of the financial crisis.
Compounding the risks, authorities and central banks now have less room to act in the event of another crisis, said the WEF.
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