Billionaire speculator George Soros has added to the gloom in global markets by claiming the world risks a return to the turmoil of the 2008 financial crisis.
Soros, who famously helped to force the pound out of the exchange rate mechanism on Black Wednesday in 1992, highlighted China’s struggles to find a new growth model and said its currency devaluation was spreading problems to the rest of the world.
“China has a major adjustment problem,” Soros told an economic forum in Sri Lanka on Thursday, according to news service Bloomberg.
“I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”
The investor-turned-philanthropist has previously warned about a new crash. In 2011 he said the eurozone debt crisis was more serious than the 2008 global financial crisis.
Marc Ostwald, a strategist at ADM Investor Services International, said Soros drawing parallels with 2008 would “only serve to cast a long shadow” over markets.
“It should be noted that the current turmoil distinguishes itself from 2008, when reckless lending, wilful blindness to a mountain of credit sector risks, and feckless and irresponsible regulation and supervision of markets were the causes of the crash,” Ostwald said in a research note.
