Bank of England boss warns over risk of a global financial meltdown as bad as 2008
Andrew Bailey has warned the world may face a crisis as grave as the banking meltdown in 2008.In a letter to the IMF’s main steering committee, which meets today, the Bank of England Governor said ‘the conflict in the Middle East has resulted in a substantial shock to the global economy’.He warned of threats to financial stability – expressing concern over ‘stretched asset valuations’, such as elevated share prices, stresses in the private credit markets and liquidity issues.‘Put simply, there is an increased likelihood that multiple vulnerabilities could crystallise at the same time, thereby amplifying the threat to financial stability and the provision of critical financial services,’ Bailey said.Cautioning against dismissing recent private credit failures, he said there could be ‘a wider loss of confidence, reminiscent of the 2008 financial crisis’.At the IMF last night Bailey also flagged up the ‘cost of public debt is a vulnerability’ – a problem for the UK where high borrowing and debt, and above-target inflation have pushed up the yield on government bonds. His letter was issued in his role as chairman of the global Financial Stability Board, set up after 2008 to anticipate and prevent another crisis. Concerns: Bank of England governor Andrew Bailey, pictured, said the Iran war has caused a big shock to the global economy DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Bank of England boss warns over risk of a global financial meltdown as bad as 2008
