De Cos Warns on Growing ‘Situational’ Risk to Financial System

Threats to the financial system are increasingly “situational” and unlikely to follow the same playbook as previous crises, the head of the Bank for International Settlements said Wednesday, as he called for greater global co-ordination to meet the demands of a more uncertain world.

Pablo Hernandez de Cos, the former governor of the Bank of Spain who is among the leading candidates to succeed Christine Lagarde as president of the European Central Bank, said “geopolitical fragmentation” was reshaping trade flows, capital allocation and cross-border financial linkages. At the same time demographic shifts are changing how households save, suggesting “historical relationships may be less reliable guides to future performance.”