BoE Governor and FSB Chair Mark Carney Warns of Risk of Sharp and Disorderly Reversal in Financial Markets

More financial risk alarm bells from political authorities. 

Bank of England Governor and Chairman of G-20’s Financial Stability Board Mark Carney just warned of the high risks of “sharp and disorderly reversal” in financial markets.

From Reuters: (bold mine)

The world has adjusted well to divergent growth and monetary policy expectations but the risk of a "sharp and disorderly reversal" in financial markets remains, Financial Stability Board Chairman Mark Carney said on Saturday.

"The risk of a sharp and disorderly reversal remains, given compressed credit and liquidity risk premia," Carney, whose FSB oversees the global financial system, said in a statement to the International Monetary Fund's steering committee.

Carney, who is governor of the Bank of England, said market participants needed to be mindful of the risk of diminished market liquidity, asset price discontinuities, and contagion across markets.

"The impact of lower commodity prices, a stronger U.S. dollar and moderating economic growth may lead to further challenges for the financial resilience of some emerging market and developing economies, including the risk of capital flow volatility," he added.

Accumulated risks have become so apparent that even the usually blind political authorities seem as already anticipating them.

Record stocks in the face of record imbalances at the precipice.