Economic researcher Moritz Schularick (IfW) warns of the financial crisis

According to Moritz Schularick, President of the Institute for the World Economy (IfW), the bankruptcy in the USA, which caused unrest at the end of last week, could lead to a financial crisis overall. The background is the decade with “very low interest rates”, after which upheavals could occur. In addition, Schularick called on the West not to give up the dialogue with China – precisely because of climate policy.

Unsurprisingly, dislocations after a decade of very low interest rates – how widespread will this be?

“The bankruptcy of the Silicon Valley Bank in the USA is threatening turbulence on the financial markets. “By now it’s clear to everyone: The financial system is suffering enormous losses due to rising interest rates, especially in the case of long-term bonds and real estate loans,” said Moritz Schularick, the new President of the Institute for the World Economy (IfW), the “Süddeutsche Zeitung”.

“It gets tricky when customers can withdraw their money at short notice. Then the losses can be so high that the bank defaults, as happened in America.” Asked whether a financial crisis was imminent, Schularick said it would be very surprising if there were no disruptions after a decade of very low interest rates: “ Research shows that the dangers are greatest when interest rates rise again after long periods of loose monetary policy.” Central banks are called upon to keep the whole thing under control. Schularick called on the West to keep in touch with China. A lot is going wrong in the country, from human rights violations to more aggressive foreign policy and more autocracy in the regime. But China is the second largest economy in the world, “it will not disappear from the scene.”