BIS: Governments Must Cut Spending or Risk 'Too Late' Panic in Markets

Forex - The Bank for International Settlements (BIS) has urged global policymakers to take action on rising debt levels, warning that failure to do so could expose them to the risk of rebellion in global markets.

Claudio Borio, one of the institution's senior economists, cautioned that governments must rein in spending before bond investors stage a protest. In a statement to journalists, the head of the monetary and economic department, Claudio Borio, said that if governments expected a wake-up call from the markets, it would be "too late."

According to Bloomberg, during the presentation of a quarterly report, Borio remarked, "The global financial outlook continues to be extremely worrisome. BIS, which facilitates cooperation among the world's central banks, has long been concerned about the ballooning debt levels. The latest quarterly report observed that financial concerns have emerged in many countries, prompting government bondholders to demand higher yields on bonds."

Borio added, "Due to the significant role of the dollar in the global financial system, the U.S. finds itself in an exceptional position. The warning signs may take longer to appear, but once they do, their impact on the global economy will be more pronounced."

Economists have actively raised alarm bells regarding excessive U.S. spending, warning of consequences such as inflation, market volatility, and declining quality of life for Americans.