Investors should be more concerned about an overheating financial market at a time when consumer debts are rising to unsustainable levels, according to the global body for central banks.
In its quarterly financial review, the Bank for International Settlements (BIS) said investors were choosing to bask in the "light and warmth" of improving global growth, muted inflation and soaring stock markets. However, record high debt levels and the scale of this year's rally in asset prices are both reminiscent of the pre-2008 financial crisis era, according to the BIS.
"The vulnerabilities that have built around the globe during the long period of unusually low interest rates have not gone away. High debt levels, in both domestic and foreign currency, are still there. And so are frothy valuations," Claudio Borio, head of the BIS's monetary and economic department, said in the report published Sunday.