{"id":30154,"date":"2018-01-25T10:43:52","date_gmt":"2018-01-25T15:43:52","guid":{"rendered":"http:\/\/olduvai.ca\/?p=30154"},"modified":"2018-01-25T10:43:52","modified_gmt":"2018-01-25T15:43:52","slug":"perfect-storm-global-financial-system-showing-danger-signs-says-senior-oecd-economist","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=30154","title":{"rendered":"&#8216;Perfect storm&#8217;: Global financial system showing danger signs, says senior OECD economist"},"content":{"rendered":"<header class=\"_2-5AL\" data-reactid=\"340\">\n<h3 data-reactid=\"351\">&#8216;Perfect storm&#8217;: Global financial system showing danger signs, says senior OECD economist<\/h3>\n<\/header>\n<aside class=\"_1ki1P\" data-reactid=\"353\">\n<section class=\"_3eMES\" data-reactid=\"354\">\n<div class=\"_1mseD\" data-reactid=\"355\"><\/div>\n<div class=\"_2m3HK\" data-reactid=\"361\">\n<div class=\"_2Cn91\" data-reactid=\"363\">\n<div class=\"_2KkCz\" data-reactid=\"364\">The world financial system is as dangerously stretched today as it was at <a href=\"http:\/\/www.smh.com.au\/business\/the-economy\/10-years-since-the-gfc-20170526-gwe5f2.html\" data-reactid=\"372\">the peak of the last bubble<\/a> but this time the authorities are caught in a &#8220;policy trap&#8221; with few defences left, a veteran central banker has warned.<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/aside>\n<section class=\"_1ysFk\" data-reactid=\"368\">\n<div class=\"_1665V\" data-reactid=\"369\">\n<p data-reactid=\"374\">Nine years of emergency money has had a string of perverse effects and lured emerging markets into debt dependency, without addressing the structural causes of the global disorder.<\/p>\n<div data-reactid=\"376\">\n<figure class=\"_3ujPS _3g3zI\" data-reactid=\"377\"><a data-reactid=\"378\"><picture data-reactid=\"379\"><source srcset=\"https:\/\/static.ffx.io\/images\/$zoom_0.49,$multiply_2.1848739495798317,$ratio_1.776119,$width_357,$x_1,$y_0\/t_crop_custom\/t_sharpen,q_auto,f_auto\/88428d010da452150f81ed1b4f746d745eb29c80\" media=\"(min-width: 1024px)\" data-reactid=\"380\" \/><source srcset=\"https:\/\/static.ffx.io\/images\/$zoom_0.49,$multiply_2.689075630252101,$ratio_1.776119,$width_357,$x_1,$y_0\/t_crop_custom\/t_sharpen,q_auto,f_auto\/88428d010da452150f81ed1b4f746d745eb29c80\" media=\"(min-width: 768px)\" data-reactid=\"381\" \/><img srcset=\"https:\/\/static.ffx.io\/images\/$zoom_0.49,$multiply_2.1512605042016806,$ratio_1.776119,$width_357,$x_1,$y_0\/t_crop_custom\/t_sharpen,q_auto,f_auto\/88428d010da452150f81ed1b4f746d745eb29c80\" alt=\"William White says the lessons from the GFC have been forgotten.  \" data-reactid=\"382\" \/><\/picture><\/a><figcaption class=\"_3CZmy\" data-reactid=\"383\">\n<p data-reactid=\"384\">William White says the lessons from the GFC have been forgotten.<\/p>\n<p><cite data-reactid=\"385\">Photo: AP<\/cite><\/figcaption><\/figure>\n<\/div>\n<p data-reactid=\"389\">&#8220;All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten,&#8221; said William White, the Swiss-based head of the OECD&#8217;s review board and ex-chief economist for the Bank for International Settlements.<\/p>\n<div data-reactid=\"391\">\n<figure class=\"_3ujPS _3g3zI\" data-reactid=\"392\"><a data-reactid=\"393\"><picture data-reactid=\"394\"><source srcset=\"https:\/\/static.ffx.io\/images\/$zoom_0.066,$multiply_2.1848739495798317,$ratio_1.776119,$width_357,$x_0,$y_10\/t_crop_custom\/t_sharpen,q_auto,f_auto\/8495e58cc69906cf85726f5769a06a7c1206c21d\" media=\"(min-width: 1024px)\" data-reactid=\"395\" \/><source srcset=\"https:\/\/static.ffx.io\/images\/$zoom_0.066,$multiply_2.689075630252101,$ratio_1.776119,$width_357,$x_0,$y_10\/t_crop_custom\/t_sharpen,q_auto,f_auto\/8495e58cc69906cf85726f5769a06a7c1206c21d\" media=\"(min-width: 768px)\" data-reactid=\"396\" \/><img srcset=\"https:\/\/static.ffx.io\/images\/$zoom_0.066,$multiply_2.1512605042016806,$ratio_1.776119,$width_357,$x_0,$y_10\/t_crop_custom\/t_sharpen,q_auto,f_auto\/8495e58cc69906cf85726f5769a06a7c1206c21d\" alt=\"The Trump Administration's tax and spending blitz has pushed the US budget deficit toward $US1 trillion.\" data-reactid=\"397\" \/><\/picture><\/a><figcaption class=\"_3CZmy\" data-reactid=\"398\">\n<p data-reactid=\"399\">The Trump Administration&#8217;s tax and spending blitz has pushed the US budget deficit toward $US1 trillion.<\/p>\n<\/figcaption><\/figure>\n<\/div>\n<p data-reactid=\"402\">Professor White said disturbing evidence of credit degradation is emerging almost daily. The latest is the disclosure that distressed UK construction group Carillion quietly raised \u00a3112 million ($195 million) through German Schuldschein bonds. South African retailer Steinhoff also tapped this obscure market, borrowing \u20ac730 million ($1.11 billion).<\/p>\n<\/div>\n<\/section>\n<section class=\"vPaWe\" data-reactid=\"410\">\n<div class=\"_1ysFk\" data-reactid=\"411\">\n<div class=\"_1665V\" data-reactid=\"412\">\n<div class=\"ymInT\" data-reactid=\"413\">\n<div class=\"_1JYfJ\">\n<div class=\"_1PorT\">Schuldschein loans were once a feature of rock-solid lending to family Mittelstand companies in Germany. The transformation of this corner of the market into a form of high-risk shadow banking shows how the lending system has been distorted by quantitative easing (QE) and negative interest rates. Professor White said there was an intoxicating optimism at the top of every unstable boom when people convince themselves that risk is fading, but that is when the worst mistakes are made. Stress indicators were equally depressed in 2007 just before the storm broke.<\/div>\n<\/div>\n<\/div>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>&#8216;Perfect storm&#8217;: Global financial system showing danger signs, says senior OECD economist The world financial system is as dangerously stretched today as it was at the peak of the last bubble but this time the authorities are caught in a &#8220;policy trap&#8221; with few defences left, a veteran central banker has warned. Nine years of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5151,18137,124,195,18138,1603,534,661,662,690],"class_list":["post-30154","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ambrose-evans-pritchard","tag-brisbane-times","tag-central-banks","tag-debt","tag-emergency-money","tag-global-financial-system","tag-monetary-policy","tag-qe","tag-quantitative-easing","tag-risk"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=30154"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30154\/revisions"}],"predecessor-version":[{"id":30155,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30154\/revisions\/30155"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=30154"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=30154"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=30154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}