Business

LONDON — An ugly start to European trading pushed world shares towards their lowest level in a year on Tuesday, as negative drivers from Saudi Arabia's diplomatic isolation to worries about Italy's finances and trade wars piled on the pressure.

Selling escalated from Wall Street into a heavy selloff in Asia before hitting Europe, which was facing a fifth day of uninterrupted declines.

The tech sector posted the worst performance after chipmaker AMS plunged 17 per cent as its outlook triggered alarm bells, but there was a broader force at play.

The pan-European STOXX 600 was near a two-year low with almost half of its stocks now in bear-market territory — down 20 per cent from their peak. 

Germany's DAX also fell to late 2016 lows, London's FTSE was down near April lows, and MSCI's world share index was just two points of a one-year low.

"This morning weaker stocks in Asia raised some eyebrows and overall sentiment is suffering from trade tensions, Italy to Brexit; a concoction of concerns," said ING strategist Benjamin Schroeder.

The euro also fell towards a two-month low and Italian bonds struggled before a European Commission meeting that could see Brussels take the unprecedented step of demanding changes to Italy's recently laid out budget plans. 

That has bred some doubt about the European Central Bank (ECB) raising interest rates next summer, leaving the euro at $1.4390. Doubts about Britain's prime minister, mired in a stalemate over Brexit, kept the pressure on sterling.

All that contributed to the risk-averse mood, with the safe-haven Japanese yen and Swiss franc strengthening while higher-yielding currencies like the Australian and New Zealand dollars fell.

"The prospect of a normalisation of [ECB] monetary policy was the main reason why the euro was able to appreciate over the past year. However, there is a rising risk that this support is now going to crumble," Commerzbank analyst Thu Lan Nguyen said.

Saudi tensions 

Markets were also waiting for Turkey's president to reveal his country's take on the killing of Saudi Arabian journalist Jamal Khashoggi at a Saudi consulate in Istanbul this month.

Saudi Arabia, a top crude oil exporter, faces international pressure to provide all the facts about an incident that has raised a global storm and added the threat of sanctions against the kingdom to a list of market concerns.

US President Donald Trump said on Monday he was not satisfied with what he had heard from Saudi Arabia about the killing, but expressed reluctance to punish the kingdom economically.

Investors worry that may lead to Saudi retaliation through crude oil, although a Saudi pledge to play a "responsible role" and keep markets supplied held down crude prices on Tuesday.

Front-month Brent crude oil futures were at $79.51 a barrel, down 0.4 per cent. US West Texas Intermediate (WTI) crude futures were at $69.12 a barrel, dropping 0.35 per cent.

Asia's overnight tumble gave back some of the ground the region had clawed back over the last two sessions.

MSCI's broadest index of Asian shares dropped 2 per cent to a 1.5 year low, with declines in many of the region's heavyweight bourses even more pronounced.

South Korea's Kospi and Hong Kong's Hang Seng both fell 3 per cent and Japan's Nikkei lost 2.7 per cent.

"We've got a few negative factors when market sentiment was already fragile," said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management. "And earnings from some Japanese companies were weaker than expected, with some starting to blame trade wars."

The yen gained 0.4 per cent amid the risk-off mood to 112.42 to the dollar.

The yuan was little changed, but stood near Monday's 21-month low of 6.9445 per dollar in the onshore trade on expectations China will pursue looser monetary policy to cope with pressure from US President Donald Trump on tariffs.

THE HAGUE — Dutch electronics giant Philips, which is focusing its business on medical equipment and services, on Monday posted higher third quarter sales but profits dipped due to currency headwinds.

Sales rose 4 per cent to 4.3 billion euros ($4.9 billion) year-on-year and orders for the Amsterdam-based group’s medical diagnostic and treatment machines grew 11 per cent.

Net profit in the three months to September fell to 292 million euros from 423 million euros a year earlier.

“While I am pleased with the continued strong 11 per cent order intake growth in the quarter, operational improvements were partly offset by foreign exchange headwinds,” Philips Chief Executive Frans van Houten said.

Philips Chief Financial Officer Abhijit Bhattacharya told a teleconference Philips was particularly hit by falls in the Turkish lira and Argentine peso.

Best known for the manufacture of light bulbs, electrical appliances and television sets, Philips has gradually pulled out of these activities in face of fierce competition from Asia.

It focuses now more on high-end medical and health technology, such as computer tomography and molecular imaging, as well as household appliances.

The group, which sold its first light bulb a few years after it was founded in 1891, moved to list its Philips Lighting division, now known as Signify, in mid-2016 which joined the Amsterdam stock exchange, the top-tier AEX, in March this year.

Philips reiterated its objective of increasing sales by 4-6 per cent in the 2017-2020 period.

The group, however, said in view of growing tensions in international trade, it planned to promote local production further, for instance in China, to try to avoid the fallout from tit-for-tat trade wars between Beijing and Washington.

“It’s good to know that Philips distributes production activities in a uniform way around the world, with about one-third in Europe, one-third in China and one-third in the US,” Philips spokesman Ben Zwirs told AFP.

“This creates flexibility.”

PIRAEUS, Greece — Chinese shipping giant Cosco on Friday said it has ambitious plans for the Greek port of Piraeus, including boosting already-bustling container and car piers and a five-star hotel expansion.

The Chinese company bought the port, one of Europe's busiest, a decade ago, just before Greece plunged into a debt crisis that is still weighing on the country's finances.

"We do our best to improve the infrastructure to give a good image of our port," Piraeus Port authority CEO Captain Fu Chengqiu told reporters.

"Piraeus gives the...fastest possible connection" between the Far East and Europe, added deputy CEO Angelos Karakostas.

Cosco has already spent close to a billion euros ($1.15 billion) on Piraeus over the past decade, officials said, and plans to add another 298 million euros over the next five years.

To do that, however, they need the Greek government to approve a master plan that should have been finalised in June.

The company now hopes for a breakthrough in early November.

Karakostas said PPA also wants to remodel three derelict buildings as five-star hotels, and build a fourth from scratch.

"We have seen [hotel operators and investors] and there is great interest," he said.

Cosco has already spent some 580 million euros to acquire, modernise and expand the port's container terminals, which in 2017 handled over four million TEU, or 20-foot equivalent containers.

"Last year we were in third position in the Mediterranean following Valencia and Algeciras. This year, based on the current trend, we consider we'll be either second or first," Karakostas said.

Meanwhile, the port's car pier took in 430,000 cars in 2017, a figure expected to rise to 460,000 in 2018.

An ongoing upgrade to Greece's rail network, parts of which are still single-track and not fully electrified, will further help goods traffic. 

Cosco in 2008 acquired the port's two main container terminals for 35 years. In 2016 it also took over the Piraeus Port authority — and the third remaining container terminal — until 2052. 

The port also has 11 cruise berths — already among the most expansive in the Mediterranean — and plans to add two more for larger new generation ships in a bid to make Piraeus a cruise home port.

Over 16 million people took passenger ferries from Piraeus to the picturesque Greek islands last year.

Local authorities had in the past expressed misgivings about an all-out sale of the port, and local unionists had protested about low wages and working conditions on the Cosco-run docks.

Karakostas on Friday said the PPA had signed a labour agreement last year with the largest local union, and was currently negotiating contracts with two more unions.

LONDON — Tens of thousands of supporters of the European Union began marching through London on Saturday as part of what organisers say will be the largest ever demonstration to demand that the British government holds a public vote on the terms of Brexit.

The protesters waved the blue and gold flag of the EU and held up “Bollocks to Brexit” banners under sunny skies to call for another referendum on the eventual deal on how Britain will leave the world’s biggest trading bloc.

The march comes as pressure builds on Prime Minister Theresa May over her negotiating strategy with just over five months until Britain is due to leave. There is, so far, no divorce deal and some rebels in May’s Conservative Party have threatened to vote down a deal if she clinches one.

James McGrory, one of the organisers of the march, said the public should have the chance to change their minds because the decision will impact their lives for generations.

“People think the Brexit negotiations are a total mess, they have no faith in the government to deliver the promises that were made, partly because they cannot be delivered,” he said.

At the march, demonstrators carried placards saying “Brexit is pants” and “time for an EU turn”. Members of parliament from all the main political parties are set to join the demonstration.

Organisers estimate that more than 100,000 people will take part. Crowds will gather near Hyde Park and pass Downing Street and finish outside of parliament.

The 2016 referendum saw 52 per cent vote in favour of leaving the European Union. But the past two years have been politically fraught as the government has struggled to agree on a plan and there are fears that Britain leave the bloc without a deal.

Some opinion polls have shown a slight shift in favour of remaining in the European Union, but there has yet to be a decisive change in attitudes and many in Britain say they have become increasingly bored by Brexit.

The prime minister has repeatedly ruled out holding a second referendum. The opposition Labour Party said last month they open to a second referendum with the option of staying in the bloc in certain circumstances.

Brexit supporters say a second referendum would trigger a major constitutional crisis.

“We had a vote, we voted to leave, the idea to have a second referendum would be incredibly damaging,” said Richard Tice, Vice Chairman of Leave Means Leave, which wants a clean break with the EU.

“People need to be under no illusions as to how people feel about what is a significant potential for a total betrayal of democracy in this country.”

MENLO PARK, United States — In Facebook's "War Room," a nondescript space adorned with American and Brazilian flags, a team of 20 people monitors computer screens for signs of suspicious activity.

The freshly launched unit at Facebook's Menlo Park headquarters in California is the nerve centre for the fight against misinformation and manipulation of the largest social network by foreign actors trying to influence elections in the United States and elsewhere.

Inside, the walls have clocks showing the time in various regions of the US and Brazil, maps and TV screens showing CNN, Fox News and Twitter, and other monitors showing graphs of Facebook activity in real time.

Facebook, which has been blamed for doing too little to prevent misinformation efforts by Russia and others in the 2016 US election, now wants the world to know it is taking aggressive steps with initiatives like the war room.

"Our job is to detect... anyone trying to manipulate the public debate," said Nathaniel Gleicher, a former White House cybersecurity policy director for the National Security Council who is now heading Facebook's cybersecurity policy. "We work to find and remove these actors."

Facebook has been racing to get measures in place and began operating this nerve centre — with a hastily taped “War Room” sign on the glass door — for the first round of the presidential vote in Brazil on October 7.

It did not take long to find false information and rumours being spread which could have had an impact on voters in Brazil.

"On election day, we saw a spike in voter suppression [messages] saying the election was delayed due to protests. That was not a true story," said Samidh Chakrabarti, Facebook's head of civic engagement.

Chakrabarti said Facebook was able to remove these posts in a couple of hours before they went viral.

Humans and machines 

At the unveiling of the war room for a small group of journalists including AFP this week, a man in a gray pork pie hat kept his eyes glued to his screen where a Brazilian flag was attached.

He said nothing but his mission was obvious — watching for any hints of interference with the second round of voting in Brazil on October 28.

The war room, which will ramp up activity for the November 6 midterm US elections, is the most concrete sign of Facebook's efforts to weed out misinformation.

With experts in computer science, cybersecurity and legal specialists, the centre is operating during peak times for the US and Brazil at present, with plans to eventually work 24/7.

The war room adds a human dimension to the artificial intelligence tools Facebook has already deployed to detect inauthentic or manipulative activity.

"Humans can adapt quickly to new threats," Gleicher said of the latest effort.

Chakrabarti said the new centre is an important part of coordinating activity, even for a company that has been built on remote communications among people in various parts of the world.

"There's no substitute to face to face interactions," he said.

The war room was activated just weeks ahead of the US vote, amid persistent fears of manipulation by Russia and other state entities, or efforts to polarise or inflame tensions.

The war room is part of stepped up security announced by Facebook that will be adding some 20,000 employees.

"With elections we need people to detect and remove [false information] as quickly as possible," Chakrabarti said.

The human and computerised efforts to weed out bad information complement each other, according to Chakrabarti.

"If an anomaly is detected in an automated way, then a data scientist will investigate, will see if there is really a problem," he said.

The efforts are also coordinated with Facebook's fact-checking partners around the world including media organisations such as AFP and university experts.

Gleicher said the team will remain on high alert for any effort that could lead to false information going viral and potentially impacting the result of an election.

"We need to stay ahead of bad actors," he said. "We keep shrinking the doorway. They keep trying to get in."

AMMAN- AllympiaPass, a fitness membership App, constituting the largest fitness network in the Middle East, celebrates first anniversary this month with a robust presence in Jordan, Lebanon, Egypt and Kuwait. The network is working towards a steady expansion into 9 additional countries by the end of 2018.

AllympiaPass promises a unique fitness experience to its members by providing them access to world-class fitness clubs, classes and highly trained specialists, through one membership only. Members can enjoy designing a personalised workout routine through a wide variety of gyms and classes across their city, through their memberships.

"We managed to create a unique fitness concept that caters to the different needs and priorities of our members across the region. With one membership only, our members take on a health and fitness journey personalized to their own needs, while providing them with hundreds of fitness facilities and classes at their fingertips.” commented Anas Shami, CEO.

AllympiaPass currently encompasses 250 fitness centers across the region and 1000s of fitness activities and classes.

Within its first year, the App has managed to attract over 12,000 active monthly users with a total of 65,000 fitness class bookings, and is ranked number 1 app on iOS and android in the category of health and fitness.

Members can book for a friend through their own membership, and track their fitness activities and destinations through the App’s social network feature. AllympiaPass is expected to have around 2000 fitness partners within its network by the end of 2018.

BENGALURU — Emerging market stocks hit one-week highs on Wednesday as a strong start to the US corporate earnings season encouraged investors globally to take on more risk after a sell-off last week. 

A grind higher for the dollar kept the MSCI index of major emerging currencies under pressure with South Africa's rand near a two-week low and the rouble and Turkish lira struggling to hold on to early gains.

But stock markets in Korea, China and Turkey — all hit by this year's sell-off of riskier emerging market assets — gained ground after the worst two weeks since February for the sector as a whole. 

"Risk has come back into markets, and the bulls have wrestled back control," said Chris Weston, head of research with Australian foreign exchange brokerage Pepperstone. "We can see the relief playing through in Asia. China found good buyers."

Emerging market currencies have also sunk this year, led by Turkey's lira, as rising US interest rates pulled capital back into the dollar and worries about global growth and trade unnerved investors in the developing world. 

The US Federal Reserve issues its September meeting minutes later on Wednesday and a bullish outlook from the US central bank on the economy that ignores signs of tension on financial markets is likely to impinge further on emerging markets. 

China's yuan edged lower in offshore trade in spite of the people's bank setting a stronger midpoint at the daily fixing. 

Koon Chow, a strategist at UBP, argued that any further weakness in emerging bond markets was likely to focus on higher-rated bonds with yields closer to US treasuries. 

"EM currencies are cheap, there is a lot of bad news baked in. Those will be insensitive [to the minutes]," he said. 

"The high rated stuff which have super low yields like central Europe, bits of Asia, where yields are maybe 1.5 per cent or 1 per cent above US treasuries, will be sensitive."

A survey by Bank of America Merrill Lynch showed a record number of investors said emerging market currencies are undervalued — the cheapest valuation since the survey began.

The Turkish lira dipped a day after data showed industrial production grew at its slowest pace in almost two years in August, reinforcing concerns about a sharp slowdown in the economy. 

A Reuters poll showed Turkish economic growth was expected to fall short of sharply lowered government forecasts this year and next, with a recession now likely in the coming six months.

Still, the Turkish treasury said it had sold $2 billion of the 5-year Eurobond at a yield of 7.5 per cent with demand exceeding $6 billion — pointing to a recovery in investors' confidence in the country.

South Africa's rand weakened for the first time in five days as investors awaited retail sales for clues on the economy's health, especially after it unexpectedly tipped into recession in the second quarter.

Ratings agency Moody's said on Tuesday that it expected new South African Finance Minister Tito Mboweni to keep the government's broad policies intact in the medium-term budget speech due next week.

FRANKFURT AM MAIN — Auto giant Volkswagen (VW) cleared a new hurdle in its "dieselgate" scandal on Tuesday, paying a hefty fine to close a German investigation into subsidiary Audi, but the group is not yet in the clear over its years of emissions cheating.

In a statement, VW said high-end manufacturer Audi had agreed to pay an 800 million euro ($927 million) fine issued by Munich prosecutors.

"Audi AG has accepted the fine" for "deviations from regulatory requirements in certain V6 and V8 diesel aggregates [motors] and diesel vehicles", the group said.

In their own communique, Munich prosecutors confirmed their so-called "administrative proceeding" against Audi was now "closed".

VW admitted in 2015 to building so-called "defeat devices" into 11 million cars worldwide, in a massive cheating scandal dubbed "dieselgate".

Software allowed vehicles to appear to meet emissions rules under lab conditions, while in fact spewing many times more harmful gases like nitrogen oxides (NOx) on the road.

Tuesday's fine brings the total costs to Volkswagen from dieselgate to more than 28 billion euros ($32.45 billion) since 2015 — most of that in penalties, buybacks and refits in the United States.

VW paid a one-billion-euro ($1.16 billion) penalty to Brunswick prosecutors in June over its own-brand vehicles.

The fines leave just sports car subsidiary Porsche still facing an "administrative" diesel case among the group's companies.

And while the June fine flowed into a total of 1.6 billion euros paid out over dieselgate in the second quarter, the car giant reported profits up 3.4 per cent year-on-year between April and June, at 3.3 billion euros.

Relieved investors welcomed the Audi news, with VW shares rebounding from an initial drop to gain 2.5 per cent at 148 euros by 12:50pm.

Managers on the hook 

Despite Tuesday's agreement, other probes against individual managers and executives from the VW group remain open.

Targets include former chief executives Martin Winterkorn and Matthias Mueller, present VW boss Herbert Diess and supervisory board chairman, Hans Dieter Poetsch.

At Audi itself, former chief executive Rupert Stadler was removed from his post by VW earlier this month.

Prosecutors had jailed him in June, saying this was necessary to stop him trying to influence witnesses in his case over fraud and issuing false certificates.

In a Brunswick court case, investors are pursuing VW with claims totalling some 9 billion euros over the shares' 40-per cent plunge in value in the days after "dieselgate" was unveiled.

They say executives should have informed them sooner of the risks to the group.

And a similar case with a potential billion-euro price tag is underway in Stuttgart against holding company Porsche SE, which owns a controlling stake in VW.

Meanwhile the German government has opened a route for car owners to launch collective cases against the manufacturers, with a first one expected for early November.

Reshaping industry 

The dieselgate fallout is far from confined to VW alone.

German car industry stalwarts like BMW or Mercedes-Benz parent Daimler have also become the targets of official probes, while French-owned Opel was confronted with a new investigation on Monday.

What's more, tough new emissions rules are squeezing carmakers to reduce their fleets' output of both greenhouse gas carbon dioxide (CO2) and harmful NOx.

A new EU emissions testing scheme known as WLTP has slowed deliveries of new cars, slashing registrations by 30.5 per cent in September.

And drivers of older diesels face looming bans from many German city centres as the country scrambles to meet EU air quality targets.

"The current campaign against individual mobility and thereby against cars is reaching existential scale," VW chief executive, Herbert Diess, complained to a component makers' conference on Monday, business daily Handelsblatt reported.

In a study seen by the same paper, the Centre of Automotive Management commented more drily that "the fat years for the car industry are over" as a new environment of trade wars and tougher emissions rules bites into sales and margins.

DUBAI — Saudi Arabia's currency fell to its lowest level in two years and its international bond prices slipped on Monday over fears that foreign investment inflows could shrink as Riyadh faces pressure over the disappearance of journalist Jamal Khashoggi.

Trade in the forward currency market, used by banks to hedge investments, suggested some institutions were protecting themselves against the risk of capital outflows or US sanctions on Riyadh after the disappearance of Khashoggi, a prominent critic of Saudi authorities, in Istanbul.

But the market moves were smaller than some bouts of instability in the last several years, indicating investors were not as panicked by the Khashoggi case as they were by a plunge of oil prices that began in 2014.

US President Donald Trump threatened "severe punishment" for Riyadh if it turned out that Khashoggi was killed in the Saudi consulate in Istanbul, as Turkish officials allege. Saudi Arabia has denied this and on Sunday warned it would counter any sanctions with greater ones of its own.

Oil prices moved only slightly on Monday as analysts said they doubted Saudi Arabia, the world’s biggest exporter of crude, would risk international isolation and damage its own finances by cutting back exports at a time when it is pushing through reforms designed to create jobs and diversify its economy. 

But Krisjanis Krustins, director in the Middle East and Africa team at credit ratings agency Fitch, said the affair could hurt some parts of the reform programme.

"If there is any lasting change in investor willingness to engage with Saudi Arabia, it could lead to slower and less complete implementation of some Vision 2030 initiatives, and greater need for Saudi Arabia to use debt and internal resources to finance them," he said.

Weak private sector

The riyal was quoted at 3.7524 to the US dollar in the spot market early on Monday, its weakest rate since September 2016, Refinitiv data showed.

The central bank maintains a peg of 3.75 riyals to the dollar, and usually the currency fluctuates in a range of about 3.7498-3.7503. In November 2015, when oil prices were plunging, the riyal dropped as low as 3.7598.

In the forwards market, the dollar rose on Monday as high as 100 points against the riyal, a nine-month high, from 54 points on Friday. In 2016, it briefly rose above 1,000 points.

Yields on Saudi Arabia's US dollar bonds climbed, mostly at the long end of the curve; its notes maturing in 2046 were 15 basis points wider.

Krustins and other analysts noted that foreign investment flows into Saudi Arabia were already very low because of a weak private sector and uncertainty over regulation; this could limit the impact of any reduction of flows.

Media organisations and a growing number of executives, including JP Morgan Chase & Co chief executive Jamie Dimon, have pulled out of a major Riyadh investment conference scheduled for next week, dubbed "Davos in the Desert". 

The Saudi stock market had tumbled 7.2 per cent over the previous two trading days because of the Khashoggi case, but it rebounded 2 per 

cent on Monday. 

Traders said some institutional investors, including foreign ones, were buying stocks at the lows, believing Saudi Arabia's fundamental economic situation was unlikely to change much.

But many bankers and analysts said the Khashoggi case had fuelled perceptions of political risk in Saudi Arabia because it was the latest in a series of unexpected incidents over the past three years.

During this period Saudi Arabia has launched a war in Yemen, imposed an embargo on Qatar, arrested dozens of top officials and businessmen in a corruption purge, detained women's rights activists and seen tensions with Canada and Germany rise.

Jason Tuvey, senior emerging markets economist at London-based Capital Economics, said political developments in Saudi Arabia were becoming an increasingly important economic risk.

Nusa Dua, Indonesia — Rising US interest rates, tanking emerging market currencies and a bitter US-China trade spat could push the world towards its next financial crisis but there is still time to avert disaster, global finance chiefs have said.

The world economy is still growing but faces an “unprecedented” combination of threats, the International Monetary Fund (IMF) cautioned at an annual meeting with the World Bank in Bali this week.

Among them is growing protectionism championed by the Trump administration and the intensifying trade-and-currency battle between Washington and Beijing, which have imposed tit-for-tat tariffs on billions of dollars worth of goods.

Opening the Bali talks, Indonesian President Joko Widodo compared the dispute between the world’s two biggest economies to the hit television series “Game of Thrones”.

“Great houses, great families, battle each other fiercely to seize control over the Iron Throne,” he said.

But “confrontation and collision impose a tragic price not only on those who are defeated but also on the winners”.

And IMF chief Christine Lagarde warned of a “degree of uncertainty that we have not seen before” in international trade.

‘Constructive solutions’ 

Disaster can still be averted, officials said at the Bali meet, with reassuring talk from the global financial elite that growth remains strong — the IMF projects 3.7 per cent for this year and the next — and could yet withstand the risks gathering on the horizon.

And despite tensions, US and Chinese officials in Bali also sounded conciliatory tones.

US Treasury Secretary Steve Mnuchin described “productive” talks with the Chinese on the yuan, which Washington has accused Beijing of keeping artificially low to boost exports.

And China’s central bank Governor Yi Gang called for “constructive solutions” to the damaging tiff, but insisted that Beijing was not devaluing its currency to gain trade advantages — a practice the IMF this week called on members to avoid.

But there are also other brewing concerns, including the US Federal Reserve’s decision to raise interest rates.

This year has already seen three hikes, which experts largely agree are necessary to avoid overheating an economy with strong growth and low employment.

That has squeezed emerging markets, which are seeing capital flee towards the US enticed by higher returns, and also threatens developing countries that have large debt burdens denominated in dollars.

“The global economy continues to grow but the outlook is now challenging especially for emerging markets due to the normalisation of the US monetary policy,” Brazilian central bank Governor Ilan Goldfajn warned on Sunday.

The US “needs to be very mindful that spillover from the effect of their policies is very real for many countries”, Indonesia’s Finance Minister Sri Mulyani Indrawati added, in an interview with Bloomberg TV.

‘Repair your roof’ 

Still, there is little expectation for now of a change of gear by the Fed, despite President Donald Trump’s vocal criticism of the rate hikes.

And top officials said emerging markets should prepare for more hikes with measures that could cushion the impact, including flexible exchange rates and careful management of capital movement.

The consensus among central bankers and leading economic officials is that while the next global crisis may not be imminent, now is the time to prepare for it.

“The time to repair your roof is when the sun is shining,” French central bank Governor Francois Villeroy de Galhau told AFP.

He said the current stable global growth was a good moment “to rebuild budget reserves” and for states that can to reduce their debt loads.

The IMF has also called on central banks to begin “normalising” loose monetary policy that began in response to the last financial crisis a decade ago, to give them more room to manoeuvre in the case of a fresh economic disaster.

The need for a “cushion” in case of disaster has also been exacerbated by the rise of so-called “shadow financing”, a largely unregulated system that has spread globally, and an alarming expansion of public and private debt to more than double the world’s GDP last year.

Lagarde urged vigilance as she addressed the meetings in Bali, warning against “collective amnesia” about what sparked previous financial crises.

“Geopolitical tensions combined with... increased protectionism produced terrible developments.”