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The Bank of England governor said the global financial system is vulnerable to shocks amid a recent surge in the price of shares and other assets Andrew Bailey has warned.
Mr Bailey, Chairman of the Financial Stability Board (FSB), the fiscal risk watchdog g20 The group of nations urged greater multilateral cooperation among nations to support global financial systems.
In a letter to G20 ministers, they said rising debt levels and failure to fully implement agreed financial reforms will increase insecurity.
Mr Bailey cautioned that a “disorderly adjustment” could therefore occur, causing asset prices to fall from recent highs.
He said: “Although financial markets have seen buoyancy in recent months in most jurisdictions, valuations may now be skewed with an uncertain outlook, leaving markets vulnerable to disorderly adjustments.”
comes after this wall Street The stock fell at the fastest rate in six months after a period of strong growth.
jamie dimonJPMorgan’s boss is among those who have warned there is a significant risk of stock valuations falling over the next six months to two years.
Ahead of the latest International Monetary Fund (IMF) meeting and the release of the Global Outlook, Mr Bailey said reforms by the FSB are vital to ensuring continued financial stability.
He said: “Reforms undertaken by the FSB and other standard-setting bodies since 2009 have helped prevent the fallout from recent crises, including the Covid-19 pandemic, Russia’s illegal full-scale invasion. ukraine And a quick resolution to the banking turmoil of 2023.
“The need for such global standards and cooperation is as clear today as it was 15 years ago – not only to prevent crises but because, ultimately, a flexible system allows for the efficient allocation of capital and supports G20 member economies in promoting growth.”