The latest surge in global share prices and other assets has left markets susceptible to a crash given the current uncertain economic and geopolitical backdrop, the G20’s risk watchdog said on Monday.
Financial Stability Board (FSB) Chair, Andrew Bailey, told G20 ministers in a letter the elevated risks made maintaining multilateral co-operation crucial. Not just to prevent crises, but also to support sustainable economic growth.
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“While most jurisdictions have seen a rebound in financial markets in recent months, valuations could now be at odds with the uncertain economic and geopolitical outlook, leaving markets susceptible to a disorderly adjustment,” the letter dated October 8 and published ahead of G20 meetings in Washington this week, said.
That warning came just days before U.S. President Donald Trump’s threat of “massive” new tariffs on China in retaliation for Beijing tightening rare earth restrictions triggered Wall Street’s biggest fall in nearly six months.
