Representatives of international finance warn world leaders of coming economic crisis

© Sputnik/ Igor Samoilov

    

Heads of international financial companies have warned of the possible bursting of asset bubbles and called on state governments to better control the granting of loans to avoid a new financial crisis, DWN reported.

The paper released under the moderation of the World Economic Forum (WEF) points out that fundamental problems of the financial markets have not been resolved, despite the fact that central banks pumped millions into money markets.

Matthew Blake, Head of the Banking and Capital Markets Industry at the WEF, is one of the authors of the paper.

"In the past nine months, we have dealt intensively with the questions of financial and economic stability. We don't want to make any proposals with our declaration, but raise awareness among all stakeholders about possible dangers and the question of how to mitigate them," he said in an interview with DWN.

Blake could not name any geographical areas posing significant dangers. But the paper identified potential trouble spots, including the real estate market and shadow banks. Despite numerous announcements, shadow banks still remain unregulated and carry out high-risk which may threaten financial stability, the paper said

Blake stated that the key point — in the US as well as in Europe — is to better control the allocation of capital so that the economy does not face new imbalances. Interaction between banks and political circles is necessary to limit damage in the event of a new crisis, he claimed, adding that he expects policymakers to deal with the issue.

Comment: There has already been plenty of "interaction" between banks and political circles, and that's one of the problems in an oligarchy. For a great overview of this economic quagmire, check out 2015 the BRICS checkmate Western finance:

Long story short, banks are investing way more money than they own. Thanks to those investments that reach into the $trillions, they totally control most markets and, of course, they make huge profits when the market goes in the direction they want. But they also take tremendous risks if the market goes in the other direction.