One of the most comprehensive studies of the state of banking and markets since the financial crisis warns that “dangerous undercurrents” are a rising threat to the world economy.
The International Monetary Fund’s (IMF) Financial Stability Report says that although banks are far safer than they were in 2008 there are new risks.
Trade tensions are growing, the IMF says, and inequality has risen.
Further moves towards a trade war could “significantly harm global growth”.
Other threats to trade, such as a disorderly Brexit, could also “adversely affect market sentiment”, the IMF argues.
According to BBC News, the US-based organisation says that a “no-deal” departure from the European Union could lead to fragmentation in European money markets, meaning that finance cannot flow around the system so efficiently.
The body urges the Bank of England to be ready to provide more quantitative easing – money printing – if it is required.
