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The world is at a \u201ctipping point\u201d on debt that threatens to spark a global reckoning after years of government borrowing binges, the boss of global banking giant HSBC has warned.<\/p>\n
HSBC CEO Noel Quinn said countries risked being \u201chit hard\u201d after allowing borrowing to balloon in the wake of the financial crisis and pandemic. Speaking at the Future Investment Initiative Institute\u2019s summit in Saudi Arabia, known as Davos in the Desert, he said the current rate of borrowing was unsustainable.<\/p>\n
\u201cI\u2019m concerned about a tipping point on fiscal deficits,\u201d Quinn said. \u201cWhen it comes, it will come fast, and I think there are a number of economies in the world where there could be a tipping point and it will hit hard.\u201d<\/p>\n
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HSBC chief Noel Quinn at the bank\u2019s headquarters in Canary Wharf, London.<\/span>Credit: <\/span>Bloomberg <\/cite><\/p>\n Mr Quinn\u2019s comments came as a series of top Wall Street bankers warned about the health of the global economy as the war between Hamas terrorists and Israel threatens to spread across the Middle East.<\/p>\n Larry Fink, the chairman and chief executive of Blackrock, suggested that growing tensions threatened to throw the world into recession.<\/p>\n Speaking at the same event, he said: \u201cThere\u2019s no question if these things are not resolved, it probably means more global terrorism, which means more insecurity, which means society is going to be fearful [and] we see contractions in our economies.\u201d<\/p>\n The International Monetary Fund and World Bank sounded the alarm over global debt levels earlier this month, warning that the US and China had put public debt on course to approach the size of the entire global economy by the end of the decade.<\/p>\n Ayhan Kose, the World Bank\u2019s deputy chief economist, described the debt binge since 2010 as \u201cthe fastest, most broad based and largest\u201d the world had ever seen. Previous debt waves have all led to financial crises.<\/p>\n Kose warned that emerging markets were already in the middle of a \u201csilent debt crisis\u201d, where governments are crushed by debt and unable to fund public services.<\/p>\n Meanwhile, Jamie Dimon, the chairman and chief executive of Wall Street giant JP Morgan, called for \u201csome humility about financial forecasting\u201d.<\/p>\n \u201cI want to point out that central banks 18 months ago were 100 per cent dead wrong,\u201d he told the event in Riyadh.<\/p>\n