Bank For International Settlements Report: Big Banks Take Risks Expecting Taxpayers To Cover Losses

FRANKFURT, Germany — Governments, banks and households struggling with too much debt are dragging down the world’s economy and more needs to be done to make the banking system safer, a global organization of central banks warned Sunday.

The Bank for International Settlements said in its annual report that the world economy remains out of balance, with advanced economies struggling with debt and emerging economies growing strongly but facing risks of their own version of boom and bust.

The BIS – an intergovernmental organization of central banks based in Basel, Switzerland – said it’s key for governments to make banks take responsibility for their losses and force them to rebuild their finances. Meanwhile, the threat from risky bank behavior is growing again.

“The world is now five years on from the outbreak of the financial crisis, yet the global economy is still unbalanced and seemingly becoming more so as interacting weaknesses continue to amplify each other,” the BIS said in its 82nd annual report.

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