Are we on the verge of another financial crisis?
It is a question well worth asking as the prices of stocks and property have been sky high by central bankers flooding the markets with cheap money.
What should risk professionals do?
The first question for risk managers, internal auditors and finance professionals is; how much of the cheap and plentiful liquidity provided by Quantitative Easing, or QE as it is known, has gone into inflating asset prices—stocks, bonds and housing?
The second question is: how far will asset prices fall when the Fed and the Bank of England start to “taper” or reduce their QE and how will that impact my institution? Continue reading