Labour must focus on risk to global financial stability posed by Trump policies, not only trade | Heather Stewart

Kiir Starmer and Rashil Reeves confirmed how much the world has changed after Donald Trump “Liberation Day”With the announcement of the Prime Minister in the UK ending globalization.

But as the chancellor is preparing to travel to Washington this week to meet its international counterparts at the International Monetary Fund meetings, exhaustion He seems to see the risks purely in terms of strike on international trade.

While feverish negotiates with Washington on the customs tariff, the government presses plans to cancel the city’s organization – just as global financial stability is threatened with the chaos launched by the White House.

Follow the work a muscle approach to saving steel in Scunthorpe, and Reeves wrote The need for a “strong, smart and graceful country to support the main industries.”

However, it appears that the position of the Labor Party on the financial sector of globalization in the United Kingdom remains the position that has been determined in The letter of the palace house, the counselor In November: These rules imposed after 2008 were “very far away”.

The Governor of the Bank of England, Andrew Billy seemed to be Lifting the metaphoric eyebrow In this proposal two months later, when he gave a speech to warn: “Memories disappear in the rear vision mirror. Those who lived through him, worked through him and had to deal with him, they say:” Just remember what we had to deal with. “

Until now, little has changed, regardless of the organizers who are frequently transferred to explain themselves to the advisor, and the new standards issued, including financial behavior authority, and urging them to target growth.

But the work gives a feeling of intense relaxation with large monsters of higher financing. Larry Fink, CEO of Blackrock at Blackrock, hosted at Downing Street last fall, Tweet Starmer: “I am determined to achieve growth, create wealth and put more money in people’s pockets. This can only be achieved by working with leading companies, such as Blackrock.”

The vibrant calm was restored to the financial markets on both sides of the Atlantic Ocean last week, after selling it in the debts of the US government Trump pushed the “mutual” definitions to stop the “mutual” definitions On April 9.

However, the concern that the land movements in the treasury market – the debts of the US government – emphasized the risks in which Trump’s policy will not only rearrange commercial flows, but also may endanger global financial stability.

Trump’s open flirting with an attempt to remove the Federal Reserve Chair, Jerome Powell.

Treasury revenue is the standard that interest rates are priced around the world; Safe guarantee as a laparoscopic for risky beta.

If investors have already re -evaluated the value of treasury bonds, as some analysts suggest – because of the so -called emerging economy “political risks” – the consequences can be transmitted quickly throughout the global economy.

Such a shock will come at a time when global debt levels fall more than three times from GDP, according to the Washington International Finance Institute, which is based on its headquarters-much higher than what it was in the breakdown period in 2008.

These include huge debts that governments rise because they intervened to rid their citizens of the worst antiquities in the roaming epidemic, but also home borrowing and accumulated loans on companies bought by the private stock sector.

Not much of this borrowing has been issued by banks, which have been cautiously destroyed with the organization since the crisis-but by the least organized “special” lenders.

It was also placed by the British Special Association update in the private stocks and the Bvca Investment Capital: “The global financial crisis was the catalyst for growth, as banks adopted the most conservative lending practices and the size of their public budgets.”

Since the United Kingdom is still a pioneering global financial center, this irregular lending has barely not bankers here-where the fund managers carry $ 257.9 billion (194.7 billion pounds) of “private debt” by the end of 2023, according to BVCA: an amazing amount, which indicated 64 % of the European total.

The Bank of England is working hard to track how players in this shadow banking sector can respond in the event of a crisis-including by carrying out a complex exercise in the form of concerns they choose the Kingdom.Exploration scenario at the system levelIt was launched after intimidating the Liz Tros market.

Its results confirmed how the evil spider network of financial interconnection enlarged a possible shock.

The bank, which monitors financial stability these days, is sure that it has the tools necessary to respond, but the complexity of the system reminds us of the little understanding that links the global financial system together before the 2008 crisis.

Despite the size of the financing sector in the UK, it has not tended to generate a wall of cash floods towards the major national investment priorities, or companies grow in the UK, which complain of often struggles to find financing.

The work takes measures to encourage the investment of the private sector in green projects and infrastructure that affects their need-by integrating pension funds, and through the new National Wealth Fund, for example.

However, this active approach is more as well as the intention to reduce the organization instead of, for example, the shade made banking services under more stable control (regardless of the purchase now, and the lending is subsequently pushed, as the Labor Party was truly pressured with the plans of the Conservative Party to organize it – albeit not until 2026).

Starmer and Reeves are right to rethink globalization. But they will be wise to remember that not only SCUNTHORPE steel workers are the ones who are exposed to their merciless forces. If the crisis struck the excessive financial system in the Galba – which includes private stock companies that have been exposed to homes and custody across the UK – we are all in danger.