Rising government debt levels will cause turbulence in the global economy and financial markets unless political leaders start tackling them soon, the body that advises the world’s central banks has warned. High levels of sovereign borrowing were “one of the biggest threats, if not the biggest threat going forward for the global economy”, Claudio Borio, head of the monetary and economic department of the Bank for International Settlements, told reporters this week.
“Despite lingering risks, investor optimism about the near-term outlook set the tone for financial markets,” the BIS said, adding that the global economy “seemed to be heading for a smooth landing, and the results of the US presidential election were conclusive”.
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