The BIS was one of the few organisations to warn during 2006 and 2007 about the unstable levels of bank lending on risky assets such as the US subprime mortgages that eventually led to the Lehman Brothers crash and the financial crisis.

    The organisation’s chief economist at the time, William White, who now chairs the OECD’s review committee, warned last year that global debt levels had escalated to unstable levels largely in response to almost zero interest rates to create a situation that was “worse than 2007”.



johnnyFive:

    Investors have forgotten about risk and this is playing out in inflated asset prices and inflated valuations.

No, the bailouts of 2008 showed them that from the financial institutions' standpoint, there is no risk.


posted 2332 days ago