Global debt levels again dangerously high, Dutch experts warn

The debts of investors, home buyers, consumers, companies, and governments are rising to dangerously high levels world wide, Nout Wellink and Hans Hoogevorst warn in the Telegraaf.

Wellink and Hoogevorst were in charge of Dutch central bank DNB and Dutch authority on financial markets AFM respectively during the financial crisis that started in 2008.

According to the two financial experts, there is insufficient clarity on where the risks are, which means that markets could underestimate the rising deficits. They call te banking sector a particular cause of concern.

The rising debt phenomenon is a side effect of the monetary policy with very low interests rates, former DNB president Wellink said to the newspaper. Hoogevorst adds that the mandatory capital buffer of 3 percent for European banks is too low. "A bad thing", he said.

Hoogevorst points out that the means used to combat the previous crisis - extreme monetary policy and a lot of government money - are no longer available.