Bank for International Settlements annual report
“How,” asks the report, “could a huge shadow banking system emerge without provoking clear statements of official concern?”
How, indeed?
How big are the risks now? The answer is: very large.
As I argued in a speech at a BIS conference last week...
Martin Wolf, Financial Times, July 1 2008

“The current market turmoil in the world’s main financial centres is,” it /the report/ claims, “without precedent in the postwar period.
With a significant risk of recession in the US, compounded by sharply rising inflation in many countries, fears are building that the global economy might be at some kind of tipping point.
These fears are not groundless.”

Full text

- The global economy could face a deeper downturn than many currently expect amid rising inflation and the turmoil on financial markets, the Bank for International Settlements said at its annual meeting Monday.
"In the aftermath of a long credit-driven boom, it would not be surprising to see turmoil in financial markets, slowing real growth and temporarily rising inflation," the BIS said in its annual report.
"While difficult to predict, their interaction does appear to point to a deeper and more protracted global downturn than the consensus view seems to expect."
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Why have markets reached their exposed position?
The answer is that success breeds excess.
This is the argument of a fascinating new paper from William White,
economic adviser to the Bank for International Settlements.
Martin Wolf, Financial Times 24/5 2006