Jaime Caruana, the head of the Bank for International Settlements (BIS), in an interview with the Daily Telegraph’s Ambrose Evans-Pritchard, warned of the danger of a new Lehman Crisis as the result of the fact that debt ratios are far higher then in 2007 because of the prolonged low interest rates. He warned one rate rise could trigger a new crisis. Evans-Pritchard wrote: “The world economy is just as vulnerable to a financial crisis as it was in 2007, with the added danger that debt ratios are now far higher and emerging markets have been drawn into the fire as well, the Bank for International Settlement has warned.”

Caruana told the Telegraph that “Markets seem to be considering only a very narrow spectrum of potential outcomes. They have become convinced that monetary conditions will remain easy for a very long time, and may be taking more assurance that central banks wish to give.” He pointed to the disconnect between the rise in asset prices and the flat earnings of companies.

Caruana warned, according to Evans-Pritchard, that “investors were ignoring the risk of monetary tightening in their voracious hunt for yield… Mr Caruana said the international system is in many ways more fragile than it was in the build-up to the Lehman crisis. Debt ratios in the developed economies have risen by 20 percentage points to 275pc of GDP since then. Credit spreads have fallen to wafer-thin levels. Companies are borrowing heavily to buy back their own shares. The BIS said 40pc of syndicated loans are to sub-investment grade borrowers, a higher ratio than in 2007, with ever fewer protection covenants for creditors. The disturbing twist in this cycle is that China, Brazil, Turkey and other emerging economies have succumbed to private credit booms of their own, partly as a spill-over from quantitative easing in the West.”