Finance expert sounds alarm on 8 ways a new global crisis will hit by 2015

Lausanne, Switzerland (ots) - Arturo Bris, Professor of Finance at
IMD business school and Director of the World Competitiveness Center,
predicts that a global economic crisis is likely and that not enough
action is being taken to avoid it. Based on statistics, he said the
world could expect a financial crisis as soon as April 2015, ending
in March 2016. Bris said the cause of crisis will come from eight
possible scenarios:

1. A stock market bubble

In the last year, stock markets have performed unrealistically
well and at some point the situation will explode. In 2014, analysts
were disappointed in the first quarter because earnings were not in
line with market expectations. This means that if markets were to
revert to a reasonable level with regards to earnings, there will be
a stock market drop of between 30-35%.

2. Banking in China

A severe crisis could be driven by growing Chinese shadow banking,
a system which consists of loans mainly to government institutions
whose performance is not well monitored and not open to competition.
If this system collapses, it will negatively affect the global
economy.

3. Energy crisis

The United States, as the world's largest producer of gas, could
cause an energy crisis. If the US begins exporting to the rest of the
world, Russia might feel threatened, causing a geopolitical storm.
The US would have control over energy prices and would exert
influence over countries like the UK, India and Japan.

4. Another real estate bubble

There is risk of a property bubble forming in countries like
Brazil, China, Canada or Germany. Prices are going up because
availability of credit is huge and buyers are pushing prices up
without realizing that they do not correspond to fundamental values.

5. Ratings & bankruptcy: 'BBB as the new AA'

Companies currently have too much debt and the new norm is to have
a BBB rating. In the US there are only three companies left with an
AAA rating: ExxonMobil, Microsoft and Johnson & Johnson. If ratings
are an indicator of bankruptcy, there will be bankruptcies across the
board. If interest rates increased by 2%, half of the corporate
sector would be wiped out.

6. War & conflict

Almost everywhere, except in parts of Europe and the US, there is
increasing geopolitical tension. Events like the current crisis in
Crimea could trigger a market crash, even if there is no war.

7. Increasing poverty

Overall world poverty has increased and whenever the poor become
poorer, we can expect a social conflict. The crusade against income
inequality could also further hinder innovation and growth by
reducing the benefits of innovation, threatening the economy.

8. Cash and hyperinflation

The surplus of cash that central banks and corporations are
holding could end up damaging the economy. The ECB is lending money
to financial institutions that put it back into the ECB, which is a
vicious circle and today Google could afford to buy a majority stake
in Ireland and Microsoft could buy more than 50% of Singapore, which
is immoral.

"While many economies seem to be finally rebounding since the 2008
crisis, we shouldn't be complacent," Bris said. "Too often we do not
learn from history and do not act when faced with a crisis we know is
imminent."

Arturo Bris is Professor of Finance at IMD and directs the IMD
World Competitiveness Center ( www.imd.org/wcc) . He was a keynote
speaker at IMD's Orchestrating Winning Performance program where he
unveiled his predictions for the future.

Contact:
Michael Savage
Editor and Media Relations Specialist
+41 21 618 0453
michael.savage@imd.org