Non-financial risks may spur the next financial crisis
Asking 13,000 business leaders their top risks to doing business shows that non-financial fears are rising in importance
Source: World Economic Forum Regional Risks Report, October 2019
Outlook
The World Economic Forum (WEF) survey of 13,000 business leaders suggests that financial and non-financial risks could combine to trigger another financial crisis.
Developed nations fear cyberattacks and data fraud as much as economic risks. Four of the five top North American risks are technological. In Europe, after cyberattacks and asset bubbles, interstate conflict is third feared. Such conflict is a top-three East Asian and Eurasian concern.
Developing nations fear the impact of technology -- governance failing, unemployment and social instability. The last is top in Eurasia and second in Latin America. National governance failing is Latin America’s top risk, and second in Sub-Saharan Africa, where under-or-unemployment is top.
Impacts
- Environmental and tech risks have grown in likelihood and importance in the annual WEF risks survey since 2013; this trend will continue.
- Environmental fears will keep rising; Asia is especially worried as China and Japan fear natural disasters most, and India a water crisis.
- The top-five Middle East and North African fears are all economic and 20 Sub-Saharan African nations most fear under-or-unemployment.
- Advances in financial regulation and tech have combined since 2008-09 to cut the prominence of financial fears but raise job market fears.