In the same way that Wall Street and other markets have blithely shrugged off the threat of an all-out trade conflagration, they have paid little heed to the mountain of global debt. Yet alarm is spreading among officials and economists. Beyond the concern on absolute debt levels, the fear is that much lending may be unrecorded, suggesting an iceberg of debt more menacing than initially appears, especially where it is sold in securitised forms.
Debt crises have crept up on an unheeding world all too often and part of the reason has been the lack of transparency among private lenders – the true scale of debt became clear too late. Is the same about to happen again? Already, recorded debt levels suggest another crisis could occur as the global economy slows. Yet official data may not be telling the whole story.