A Senior banker has recently warned that the global financial system now has more risk than at the time of the financial crisis.

After a decade of low interest rates and other emergency stimulus, emerging markets have been lured into debt dependency without looking into or addressing the structural causes of the global disorder, so says the Head of the OECD’s review board and ex-chief economist for the Bank of International Settlements, based in Switzerland, William White.

He also said that the policies adopted by central banks since 2008 mean there is little authorities could do if another global financial bubble were to burst.

Ahead of the World Economic Forum in Davos, White spoke to the Daily Telegraph.  He said, “All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten.”

He went on to say that the financial system had been distorted by quantitative easing and negative interest rates.  “There is an intoxicating optimism at the top of every unstable boom when people latch on to good news and convince themselves that risk is fading, but that is precisely when the worst mistakes are made”.

Compared to 2007-08, “this time central banks are holding a particularly ferocious tiger by the tail”, as global debt levels have surged by more than 50% of GDP since the financial crisis.” says Ambrose Evans-Pritchard in the Telegraph,

In November of last year, the World Economic Forum issued a warning. A build-up of bad loans in China and India’s growing credit boom meant that banks across the world were more vulnerable to a crisis than they were ahead of the credit crunch.

Last month, historian Niall Ferguson underlined these fears, arguing that another global financial crisis is imminent.

However, it appears these warnings are falling on deaf ears. The International Monetary Fund revised up its forecast for world economic growth in 2018 and 2019, saying that sweeping US tax cuts were expected to boost investment in the world’s largest economy and help its main trading partners.

The IMF report says 120 economies, accounting for three-quarters of global economic activity, saw a pick-up last year, “the broadest synchronised global growth upsurge since 2010”.

Yet the upturn in confidence came with a note of caution from the IMF’s chief economist, Maurice Obstfeld who said: “The present economic momentum reflects a confluence of factors that is unlikely to last for long.”

He argued it was vital for governments take steps to address impediments to growth, to make it more inclusive and to make economies more resilient when the next downturn comes.

However, just exactly when that will be remains a matter of some debate.