(2013) - 'This looks like to me like 2007 all over again, but even worse.' - William White, the BIS’s former chief economist

'Global credit excess has reached or surpassed levels seen shortly before the Lehman crisis, says BIS

..

“This looks like to me like 2007 all over again, but even worse,” said William White, the BIS’s former chief economist, famous for flagging the wild behaviour in the debt markets before the global storm hit in 2008.

“All the previous imbalances are still there. Total public and private debt levels are 30pc higher as a share of GDP in the advanced economies than they were then, and we have added a whole new problem with bubbles in emerging markets that are ending in a boom-bust cycle,” said Mr White, now chairman of the OECD’s Economic Development and Review Committee.

..

The BIS said interbank credit to emerging markets has reached the “highest level on record” while the value of bonds issued in off-shore centres by private companies from China, Brazil and other developing nations exceeds total issuance by firms from rich economies for the first time, underscoring the sheer size of the debt build-up in Asia, Latin Africa, and the Mid-East.

Claudio Borio, the BIS research chief .. The BIS quietly scolded Bank of England Governor Mark Carney and his eurozone counterpart Mario Draghi, saying the attempt to use “forward guidance” to hold down long-term rates by rhetoric alone had essentially failed. “There are limits as to how far good communications can steer markets. Those limits have become all too apparent,” said Mr Borio.'

- BIS veteran says global credit excess worse than pre-Lehman, September 15, 2013



Context

Hitler’s Specter Inspires Bill White to Battle With Greenspan - By Alan Katz

BIS Quarterly Review, September 15, 2013

BIS warns global economic imbalances now worse than 2008 with emerging markets most vulnerable, 2013