Ten years after the beginnings of the global financial crisis, the risks of something similar occurring again in the near future appear to be fairly low. The amount of risky lending has been reduced, and asset prices are not generally as over-valued as they were back then. However, there is a danger that financial stability risks build up again as a result of policy being kept too loose for too long.
This Focus is an expanded version of a presentation given at the Capital Economics Annual Conference, “Ten years after the financial crisis: Is the global economy finally back to health?” held in London, Amsterdam, Stockholm and Zurich in October 2017.
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