Arturo Bris, Professor of Finance at
1. A stock market bubble In the last year, stock markets have performed unrealistically well and at some point the situation will explode. In 2014 analysts were disappointed in the first quarter because earnings were not in line with market expectations. This means that if markets were to revert to a reasonable level with regards to earnings, there will be a stock market drop of between 30-35%.
2. Banking in
3. Energy crisis
4. Another real estate bubble There is risk of a property bubble forming in countries like
5. Ratings and bankruptcy: 'BBB as the new AA' Companies currently have too much debt and the new norm is to have a BBB rating. In the US there are only three companies left with an AAA rating: ExxonMobil, Microsoft and Johnson & Johnson. If ratings are an indicator of bankruptcy, there will be bankruptcies across the board. If interest rates increased by 2%, half of the corporate sector would be wiped out.
6. War and conflict Almost everywhere, except in parts of
7. Increasing poverty Overall world poverty has increased and whenever the poor become poorer we can expect a social conflict. The crusade against income inequality could also further hinder innovation and growth by reducing the benefits of innovation, threatening the economy.
8. Cash and hyperinflation The surplus of cash that central banks and corporations are holding could end up damaging the economy. The ECB is lending money to financial institutions that put it back into the ECB, which is a vicious circle and today Google could afford to buy a majority stake in
"While many economies seem to be finally rebounding since the 2008 crisis, we shouldn't be complacent," Bris said. "Too often we do not learn from history and do not act when faced with a crisis we know is imminent."
Arturo Bris [http://www.imd.org/about/facultystaff/bris.cfm ] is Professor of Finance at IMD and directs the IMD World Competitiveness Center [http://www.imd.org/wcc ]. He was a keynote speaker at IMD's Orchestrating Winning Performance [http://www.imd.org/executive-education/owp-home ] program where he unveiled his predictions for the future.