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Next financial crisis may be looming, former HKMA chief says
[HONG KONG] Another global financial crisis may be looming as the coronavirus pandemic prompts central banks to continue engaging in quantitative easing to pump money into economies, according to a former head of the Hong Kong Monetary Authority.
"I fear that the third financial crisis may be on the horizon," Joseph Yam said in an interview broadcast on YouTube, referring to the Asian financial crisis in the 1990s and the great financial crisis after 2008 as the first and second.
"There's still a lot of money sloshing around in the world, international capital is still quite volatile and vicious and voluminous; the problematic culture is still there," he said.
Mr Yam is a member of Hong Kong's Executive Council, which assists Chief Executive Carrie Lam in policy making. He said the government running a budget deficit of nearly 10 per cent of gross domestic product is justified in these unusual times.
Mr Yam, who helped introduce Hong Kong's dollar peg in 1983, said he has full confidence in the exchange-rate system, adding that the city has large foreign reserves and a robust, transparent system.