Hawkish German finance minister Wolfgang Schäuble on Friday warned about a coming “bubble” in financial markets, in a starkly-worded comment on the current turmoil on global exchanges.
“It is certain that we are moving towards the next bubble,” said Mr Schäuble in gloomy speech in Berlin “We should draw the lessons from the last [global financial] crisis.”
While the German finance minister’s gloomy views on the risks of worldwide easy money policies stoking asset bubbles are well known, his latest criticisms carry particular weight as they coincide with upheavals in emerging markets, notably China, and corrections in leading developed markets, headed by the US.
Mr Schäuble emphasised, as he has before, that monetary policy alone cannot solve global economic problems. Structural reforms were needed, he said. “We should pay more attention to the substance of the real economy. Too strong a concentration on the financial economy is not sustainable.”
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