Real estate is risk to global economy, warns FSB

The world’s most powerful financial watchdog has warned of “further challenges and shocks” in the months ahead to key sectors, including real estate. In his regular update to G20 leaders, Klaas Knot, chair of the Basel-based Financial Stability Board, said: “The global economic recovery is losing momentum and the effects of the rise in interest rates in major economies are increasingly being felt.” He added: “There will certainly be further challenges and shocks facing the global financial system in the months and years to come.” He highlighted real estate as one area authorities should “closely monitor” for signs of stress given its vulnerability to rate rises, and urged financial providers to the sector to “manage their risks properly”. The FT (£)