The Greatest Risk Facing the International Banking System

Abstract

The 2008 financial crisis created a drop in liquidity around the globe and created an international banking system failure producing a recession that extended to all major markets. In response, governments and central banks added stimulus to stave off further reductions in economic output. As a result, global debt has increased. To contribute to the body of knowledge, this paper examines the debt and growth of debt in the major economic centers around the world. History is replete with evidence of unchecked growth leading to economic chaos. Therefore, an examination of debt levels is vital to assess the risk to the global economy. The findings of this paper reveal a significant expansion in debt, increasing the risk of another international banking crisis.

Keywords: Global debt, International banking, Japan, China, United States, European Union