The next financial crisis may be worse than that of 2008

Washington

IT is difficult to forecast when the next global economic recession will happen. It is much easier to predict its severity.

This is particularly the case in light of excessively high global debt levels, asset price bubbles and the generalised mispricing of credit market risk. Those considerations, coupled with the lack of adequate policy instruments to respond to the next global slowdown, point to a much more severe crisis than the average post-war recession.