In 2008 we had a problem because of too much debt. Since then the debt everywhere in the world has skyrocketed. The Federal Reserve, the central bank in the US increased its balance sheet by 500% in 10 years. That alone is an unbelievable statement.
He’s not alone in his worries about global debt. In it’s bi-annual Global Economic Prospects, the World Bank warned that a global debt crisis could be on the horizon as borrowing has risen to its highest level in the past 50 years. The bank warned that although debt has become more manageable due to low interest rates, a fresh financial crisis isn’t out of the question. The risk is especially prevalent among emerging and developing economies, where total debt reached nearly 170% of GDP in 2018.
Source: World BankDebt across the globe has also been building to worrying levels, though. According to the World Bank report:
Since the global financial crisis, another wave has been building, with both global debt and debt in EMDEs reaching all-time highs. The latest wave has also seen the largest, fastest and most broad-based increase in debt in EMDEs. Historically, episodes of rapid debt accumulation have often been associated with financial crises.
- Source, CCN
