Rising national debt poses a threat to financial stability according to BMR

This week, the Bank for International Settlements (BIS) advised governments to reduce borrowing to mitigate a significant threat to global financial stability and support efforts to control inflation. In its annual report on the global economy, the BIS warned that escalating debt levels expose governments to the risk of a crisis similar to the situation in the United Kingdom in 2022. During this crisis, investors withdrew from government bonds, leading to a spike in borrowing costs, currency weakening, and a sharp decline in capital markets. The BIS noted that before the Covid pandemic, the threat of high and rising debts was masked by a prolonged period of almost zero interest rates, which maintained historically low debt service costs. Read more:

The Austrian regulatory authority imposed a fine of over $20,000 on Raiffeisen. Since then, requirements for state expenditures have increased due to financing the energy transition, geopolitical issues, and the emerging burden of an aging population, with debt service costs rising again. According to the bank, it is important to take preemptive actions to avoid serious political upheavals. Furthermore, in its annual report, the BIS emphasized that excessive borrowing of state funds stimulates the economy, complicating efforts to control inflation. Source: