AI, Leverage out the Wazoo, Sky-High Asset Prices, Private Credit, Interconnectedness, and Government Debt Pose Risks to Global Financial System
The G20 Finance Ministers and Central Bank Governors get warned by the international Financial Stability Board.
Source: Wolf Street
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DW NOTE
The FSB's warning catalogs six structural problems—AI fragility, private credit opacity, sovereign debt overhang, leverage in shadow banking, and cross-border contagion—yet offers no mechanism for dealing with any of them. The G20 can't reduce government debt because that's how they fund themselves. They can't regulate private credit because it exists to evade regulation. And they won't touch asset prices because central banks spent a decade inflating them on purpose. This is a diagnosis without a prescription.