Subscribe to EIR Online


In Its Annual Report, Bank for International Settlements Warns of an Impending Financial Crisis

June 26, 2016 (EIRNS)—Calling for an urgent need to "rebalance" policy—whatever that is supposed to mean, coming from the central bank of a thoroughly bankrupt trans-Atlantic system—the Bank for International Settlements (BIS) annual report for 2015-16 said the world faces a "risky trinity" of high debt, low productivity growth and dwindling firepower at the world’s big central banks.

"Rising debt, lower productivity growth and diminishing room for policy maneuver have contributed to a build-up of vulnerabilities that give rise to three threats: macroeconomic instability; the adverse effects of persistently low interest rates; and a loss of confidence in policymaking,"

the report said.

Marc Jones of Reuters in his report today quoted head of the BIS monetary and economic department, Claudio Borio, at the General Annual Meeting of BIS, where the annual report was released, saying: "There are worrying developments, a sort of ‘risky trinity,’ that bear watching."

"Productivity growth that is unusually low, casting a shadow over future improvements in living standards; global debt levels that are historically high, raising financial stability risks; and room for policy maneuver that is remarkably narrow,"

Borio added.

The BIS has pointed out earlier as well of serious threats the world economy faces. On Jan. 20, 2016, Britain’s Guardian reported that William White, a former BIS chief economist, was warning that central bankers had used up all their ammunition.

"The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up. Debts have continued to build up over the past eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief,"

he said on the eve of the World Economic Forum at Davos.

Back to top