Unwinding QE could trigger financial crisis, warns JP Morgan

JP Morgan has warned that another financial crash could be round the corner as the decade of ultra-loose money comes to an end.
 
Central banks have purchased roughly $15 trillion (£11.3 trillion) of financial assets since the crisis, but the Wall Street bank’s head of quantitative and derivatives strategy Marko Kolanovic said this will start to unwind next year in a move that could “potentially cause a financial crisis”.
 
Dubbing the hypothetical crash the “great liquidity crisis”, he said that outflows – or lack of new inflows – from undoing stimulus could lead to “asset declines and liquidity disruptions” that in turn trigger a crash.

Lucy Burton, Financial services editor
October 5 2017 • 2:58pm