Borrowing hits record as banks set to tighten credit
Years of cheap central bank cash has delivered a rush to equity markets, pushing them to record highs, but that has been the cause of explosive credit growth
Global debt levels have climbed $500bn in the past year to a record $217-trillion, a new study shows, just as major central banks prepare to end years of super-cheap credit policies. World markets were jarred this week by a chorus of central bankers warning about overpriced assets, excessive consumer borrowing and the need to begin the process of normalising world interest rates from the extraordinarily low levels introduced to offset the fallout of the 2009 credit crash. This week, US Federal Reserve chief Janet Yellen has warned of expensive asset price valuations, Bank of England Governor Mark Carney has tightened controls on bank credit and European Central Bank head Mario Draghi has opened the door to cutting back stimulus, possibly as soon as September. Years of cheap central bank cash has delivered a sugar rush to world equity markets, pushing them to successive record highs. But another side effect has been explosive credit growth as households, companies and governments rus...
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