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Report: Schäuble warns of another global financial crisis

Outgoing German Finance Minister Wolfgang Schäuble warned that spiraling levels of global debt and liquidity pose major risks to the world economy.

In an interview with the Financial Times, he said there was a danger of "new bubbles" forming from the trillions of dollars that central banks have pumped into markets.

Schäuble also warned of risks to stability in the eurozone, particularly from bank balance sheets saddled by the post-crisis legacy of nonperforming loans.

He warned that the world was in danger of "encouraging new bubbles to form" arising from the accumulation of more liquidity and the growth of public and private debt.

His comments come a day after Christine Lagarde, managing director of the International Monetary Fund, warned that high levels of debt, rapid credit expansion in China and excessive risk-taking in financial markets are threatening global growth.

The Bank for International Settlements cautioned in September that the world had become so used to cheap credit that higher interest rates could derail the global economic recovery. It had long argued that aggressive monetary easing by central banks was fueling bubbles in asset prices.

Schäuble also said that the Brexit vote demonstrated how "foolish" it was to listen to "demagogues who say [...] we're paying too much for Europe."

"In that respect, they made a great contribution to European integration," he told the FT. "Though in the short term that doesn’t really help Britain."

Schäuble leaves his post to become the new speaker of the German Bundestag.