Low rates add to potential market risk: G-20

GROUP of 20 (G-20) finance chiefs and central bankers said low interest rates are contributing to a potential increase in financial market risk, as major policymakers rely on monetary stimulus to bolster growth.

"We are mindful of the potential for a build-up of excessive risk in financial markets, particularly in an environment of low interest rates and low asset price volatility," the G-20 officials said on Sunday in a communique released in Cairns, Australia. "We welcome the stronger economic conditions in some key economies, although growth in the global economy is uneven."

The global economic recovery has faltered since a February G-20 meeting in Sydney, as signs that Europe risks slipping into deflation offset more buoyant economies in the United States and UK and the wealth effects of stock market gains. In Asia, Japan's revival is being blunted by a sales tax increase and concerns are mounting that China's 7.5 per cent growth target for 2014 is becoming harder to attain.