Simon Jack

And you've got what some people call stretch valuations in terms of particularly the amount of money that's going into AI.

Now, if you add all of those things together...

Do you have the ingredients for another financial crisis and how might it resemble the one in 2008?

And I've been speaking to the deputy governor of the Bank of England, other people, Mohamed El-Erian, you know, esteemed economist.

And they say they do see some echoes of that.

And, you know, they agree there are some risks which are being underappreciated.

And what they tend to do is push inflation generally up, which in turn can begin to push interest rates up.

And rising interest rates place stress on the financial system because basically it makes it more expensive to...

for businesses to borrow.

Rising inflation at the same time takes money out of people's pockets.

It's generally a bad thing.

Okay, so after the financial crisis of 2008-9, banks had lots of rules applied to them so they couldn't get into risky lending.

So they were much more cautious about lending money.

And into that void sprung up a whole new industry where basically rather than banks lending money, these funds would collect money and they would lend directly to businesses.

They're like mimicking banks and they're called non-banks or sometimes shadow banks.

So that is private credit.

And this industry has grown from zero in 2008 to about $2.5 trillion today.

And because they are not banks, they're not regulated in the same way as banks.

And no one really quite has a microscope on them.

So no one really knows what they're doing.