World Economic Forum
Over US$ 100 Trillion Additional Credit Needed to Support Global Growth
- Report analysing sustainable credit finds that credit levels need to double over the next 10 years to support robust global economic growth
- Meeting credit demand could be challenging: In Asia, less developed financial systems and capital markets might constrain credit growth, while the European Union could face a gap in bank capital of up to US$ 2 trillion
- Growing global demand can be met safely if robust indicators of unsustainable lending, contagion risk and credit shortages are used
New York, USA, 18 January 2011 – Credit levels will need to double over the next 10 years, growing by US$ 103 trillion, to support consensus-projected economic growth. This doubling of credit could be achieved without increasing the risk of major crisis, finds More Credit with Fewer Crises: Responsibly Meeting the World’s Growing Demand for Credit, a report released by the World Economic Forum in collaboration with McKinsey & Company. The study develops a detailed global credit model using historical credit volumes and forecasting potential credit demand to 2020 across 79 countries, representing 99% of world credit volume. The study applies a sustainability methodology to the projected credit demand, using newly developed metrics to answer the following two questions: Will credit growth be sufficient to meet demand? Is there a risk of future credit crises and, if so, where?
No comments:
Post a Comment