
The world is not ready for the next financial crisis, which could hit us sooner than most people realise, according to David Taylor from the African Institute of Financial Markets and Risk Management at the University of Cape Town.
“It is not a question of whether there will be another financial crisis like we saw in 2008 following the US sub-prime mortgage debacle,” he said. “The question is when and where.” Taylor suggested that the next economic bust could happen due to the slowdown of China’s high growth rate in recent years. Read more about opportunities in China:- Who would have thought that China would be a golden opportunity for the UK cheese market?
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Jim Reid, an analyst at Deutsche Bank, said the market sell-off that has gripped the world had originally been driven by expectations that the US Federal Reserve would raise interest rates.
However, “China’s confrontational move of devaluing it currency and the subsequent knock-on through emerging markets, have accelerated us towards something more serious,” he said. “We always thought something would get in the way of the Fed raising rates in September and we’re perhaps seeing this now.”
Takako Masai, the head of research at Shinsei Bank in Tokyo, said: “Markets are panicking. Things are starting to look like the Asian financial crisis in the late 1990s. Speculators are selling assets that seem the most vulnerable.” Chris Towner, director of FX advisory services at foreign currency firm HiFX, echoed the sentiment by explaining that China’s “Black Monday” was spreading alarm worldwide.Share this story