Former UK Prime Minister Gordon Brown warned on Wednesday that the world may be heading into another financial crisis as many big problems remain unresolved even after a decade since the market meltdown that led to the collapse of the investment banking behemoth Lehman Brothers.
“We are in danger of sleepwalking into a future crisis,” Brown said in an interview to the Guardian.
“There is going to have to be a severe awakening to the escalation of risks, but we are in a leaderless world.”
The Labor party politician was the Prime Minister of the UK from 2007 to 2010.
Brown noted that the cooperation among central banks and governments seen during 2008 would not be possible in a post-2018 crisis as there was less scope to reduce interest rates, cut taxes and increase public spending.
Further, China was unlikely to be as cooperative a second time in providing stimulus, thanks to the trade tensions between the country and the US, he said.
“Trump’s protectionism is the biggest barrier to building international cooperation,” Brown added.
Bank of England Governor Mark Carney said in an interview to the BBC that a global financial crisis could be repeated if the financial community turned complacent.
Pointing out that the level of debt in China is “enormous relative to the size of the economy”, Carney said the developments in the Asian country posed one of the biggest risks to the global economy.
Billionaire investor Warren Buffett also warned on Wednesday that another financial crisis was inevitable due to human nature, jealousy and greed.