Head of the Bank for International Settlements (BIS), Jaime Caruana, spoke with the UK Telegraph, saying:

  • “Markets seem to be considering only a very narrow spectrum of potential outcomes. They have become convinced that monetary conditions will remain easy for a very long time, and may be taking more assurance than central banks wish to give”
  • “We are watching this closely. If we were concerned by excessive leverage in 2007, we cannot be more relaxed today,” he said.
    “It may be the case that the debt is better distributed because some highly-indebted countries have deleveraged, like the private sector in the US or Spain, and banks are better capitalized. But there is also now more sensitivity to interest rate movements”

There is (much) more detail at the (ungated) article: BIS chief fears fresh Lehman from worldwide debt surge

Its an article by Ambrose Evans-Pritchard … so be warned … AEP generates intense feeling, some love him, some loath him.