Former Federal Reserve Chair Ben Bernanke, who won the Nobel Prize in Economics on Monday for his research on financial crises, urged policy makers to watch for any worsening of financial conditions around the world as pressures from war and currency fluctuations squeeze economies.

“Even if financial problems don’t begin an episode, over time, if the episode makes financial conditions worse, they can add to the problem and intensify it, so that’s something I think that we really have to pay close attention to,” Bernanke said Monday during a press briefing at the Brookings Institution in Washington, where he’s a senior fellow.

While the US financial system is in better shape than it was ahead of the global crisis in the late 2000s, he discussed concerns elsewhere.

In Europe, for example, financial institutions could be pressured by shutdowns of natural gas flows due to Russia’s invasion of Ukraine, while emerging markets “are facing a very strong dollar and a lot of capital outflows,” he said.

Recession alert

JPMorgan Chase & Co chief executive Jamie Dimon said the US and the global economy could tip into a recession by the middle of the next year, CNBC reported on Monday.

Runaway inflation, big interest rates hikes, the Russian invasion of Ukraine and the unknown effects of the Fed’s quantitative easing policy are among the indicators of a potential recession.

“These are very serious things which are likely to push the US and the world in some kind of recession in six to nine months,” Dimon said.

BoE springs to rescue as gilts flounder

London: The Bank of England again sought to stem a sharp sell-off in Britain’s £2.1trillion ($2.3 trillion) government bond markets on Tuesday, expanding its emergency buying to inflation-linked debt.

Citing a “material risk” to financial stability after pension firms were hit by the turmoil, the BoE split its programme to buy up to 10 billion pounds of British gilts each day to include up to £5 billion of index-linked bonds.

This marked the BoE’sfifth attempt to quell market turmoil in just over two weeks, including verbal interventions, and marked another embarrassment for PrimeMinister Liz Truss whose economic agenda last month sent investors heading for the exit.

Inflation-linked gilts, typically held by pension funds and known in the market as linkers, suffered another significant sell-off on Monday as the end of the BoE’s programme approached.

Reuters