LONDON, May 7 (Reuters) – European Central Bank board member Isabel Schnabel said on Thursday that there appeared to be a disconnect between record stock market valuations and the risks facing the global economy.
“There really seems to be a kind of disconnect,” she said at an event at the London School of Economics. “One could question whether … markets are possibly a bit complacent here,” about the impacts of the Iran conflict.
Schnabel said markets appeared to assume that damage to energy supply chains from the Iran war would be rapidly reversed – something she viewed as unlikely – and had very optimistic expectations for productivity gains from artificial intelligence.
• She also touched on concerns around the private credit sector. She said it was too small for now in Europe to bring systemic risk.
• There needs to be greater transparency on the sector though before it reaches a systemic scale.
(Reporting by David Milliken; editing by Marc Jones and Chizu Nomiyama)
