FILE PHOTO: BIS General Manager Agustin Carstens leaves after G-20 finance ministers and central banks governors family photo during the IMF/World Bank spring meeting in WashingtonLONDON - The Bank for International Settlements warned on Sunday that rising government debt levels amid a number of major elections this year could roil global financial markets.
"They can surprise you with not much notice," Carstens said, pointing to the turbulence in Britain's markets following then Prime Minister Liz Truss' budget plans which put some pension funds at risk of collapse. "You really want to avoid that." "They must cut short the rise in public debt and accept that interest rates may not return to the pre-pandemic ultra low levels," he said. "We need a solid foundation to build upon".The positive, however, is that central banks are successfully reining in inflation that had hit decades-long highs after the COVID-19 pandemic and then Russia's 2022 invasion of Ukraine, which riled commodity markets.
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