Global finance faces $9 trillion stress test as dollar soars

Föhrenbergkreis Finanzwirtschaft

The world is more dollarized today that any time in history, and therefore at the mercy of the US Federal Reserve as rates rise

The Fed’s zero rates and quantitative easing flooded the emerging world with dollar liquidity in the boom years, overwhelming all defences Photo: Alamy

Sitting on the desks of central bank governors and regulators across the world is a scholarly report that spells out the vertiginous scale of global debt in US dollars, and gently hints at the horrors in store as the US Federal Reserve turns off the liquidity spigot.

This dry paper is the talk of the hedge fund village in Mayfair, and the stuff of nightmares for those in Singapore or Hong Kong already caught on the wrong side of the biggest currency margin call in financial history. “Everybody is reading it,”…

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