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Asset price crashes could continue this year, says World Economic Forum
There is still a significant risk of asset prices falling through 2009, according to the World Economic Forum's assessment of global economic risks this year, revealed at a press conference today in London.
"In 2009 I expect the financial crisis, which has been predominantly focused on the financial services industry so far, will start to spread into the real economies. For example there could be a higher level of businesses defaulting this year," added Hofmann.
From his economic research, he pointed to the US, Australia and New Zealand as being among those countries with the highest levels of asset bubble risk, as well as European nations and the Brazil, Russia, India and China group of emerging market countries. The report cited continuing falls in asset prices as one of the most important risks facing the world in 2009, alongside a sharp decline in Chinese economic growth, fiscal pressures on governments as a result of bailouts and the recession, and the consequences of global climate change.
See also: Stress tests were ignored in lead-up to crisis, Basel risk head says
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