Investors must not be complacent in valuing assets after efforts by central banks to pump money into struggling economies, a global financial risk watchdog said on Monday.
After a meeting in Zurich, the Financial Stability Board (FSB) chaired by Mark Carney said risks remain even though markets have improved and banks are in a healthier state.
Medium-term downside risks remain, given weak growth prospects and high levels of public and private sector debt in many economies. Continued strains on bank asset quality reinforce the need to complete financial repair," Carney said.
"Market participants and authorities need to be on guard against mispricing of risk and valuations of assets," he said, adding that low market valuations of banks was partly due to investor concerns over their asset valuation practices.
However, Carney sounded a more optimistic note in his personal comments on the progress made by banks.
I'm not going to make a buy, sell, hold call on the global banking
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