global context has worsened, increasing risks to the global expansion and chances of financial stress. participants in our latest financial system survey would agree. 4 the trade war is a major concern. as i said earlier, we don ’ t see a recession as the most likely outcome, particularly given that global monetary policy conditions have eased in recent months. it ’ s still our job to understand what might happen if things were to go terribly wrong. 5 that means looking at different ways that a perfect storm might play out. numerous financial vulnerabilities at the global level are all related to the usual suspect : leverage. total global debt is now more than 3 times global gross domestic product ( gdp ), much higher than it was before the great recession. this leaves many households, businesses and governments exposed should their financial situations deteriorate. 6 it also means that an economic downturn could be deeper than usual and fraught with financial stresses. i ’ ve already discussed high leverage in the household sector in canada. other countries such as sweden and australia are facing similar vulnerabilities. when it comes to non - financial corporate debt, the worries extend to both advanced economies, including canada, and emerging economies. the quality of debt has declined, with about 50 percent of investment - grade corporate bonds issued in the united states and europe now rated bbb. in a downturn, when corporate profits are challenged, the risk is that these bonds are downgraded, making it more costly for these firms to fund themselves. corporate debt in emerging markets has also exploded, as investors search for yield in the low interest - rate environment. china accounts for around two - thirds of the more than us $ 30 trillion in outstanding emerging - market corporate debt. non - bank financial intermediation has enabled a lot of this borrowing, and cross - border flows of funds into equity and debt have grown as sources of capital flows. an increasing proportion of corporate bonds are being packaged and sold to retail investors in exchange - traded funds ( etfs ). these investors are looking for higher returns, but with the sort of liquidity that they associate with equities. the biggest etf market is in the united states, but canada ’ s etf market is also growing. the concern 4 cyber risk also features prominently in their list of concerns. for more detail, see the highlights of our latest financial system survey, which we posted to our website yesterday. 5 in the october mpr, we presented a downside risk scenario

jens weidmann : welcome remarks - " the g20 agenda under the german presidency " welcome remarks by dr jens weidmann, president of the deutsche bundesbank and chairman of the board of directors of the bank for international settlements, at the 9th annual iif g20 conference " the g20 agenda under the german presidency ", frankfurt am main, 15 march 2017. * * * 1. introduction timothy adams ladies and gentlemen it ’ s a great pleasure for me to welcome you to this conference, which is a joint event of the institute of international finance ( iif ) and the german g20 presidency. many thanks to you, tim and the iif team, for organising this conference, which is taking place for the ninth time, this year just ahead of the meeting of g20 finance ministers and central bank governors in baden - baden. the economist john kenneth galbraith is quoted as joking that “ business conventions are important because they demonstrate how many people a company can operate without. " i don ’ t want to get too drawn into the merits of his humorous remark, or whether it applies to banking conferences as well, but i will say that there are compelling reasons why this conference is, indeed, an important event. one reason is that it provides a good opportunity for dialogue between official and private sector leaders. this dialogue is particularly important in such challenging times, which is also reflected in the focus on very topical issues over the next two days. " a global crisis requires a global solution. " this simple statement by the g20 heads of state or government back in april 2009 – in the middle of the financial crisis – captured the essence of the cooperation between the key industrial countries and emerging market economies. and although the g20 is an informal body – or perhaps precisely for that reason – it is an important source of impetus. as the financial crisis unfolded, the g20 grew in status to become the dominant forum for economic cooperation worldwide. it played a key role in drawing the right conclusions from the crisis. but the job isn ’ t finished yet. additional efforts are necessary to make the global financial system more stable and the world economy more prosperous. there are therefore several issues of global importance on the permanent agenda of the g20 that will continue to be pursued. in this regard, the german presidency is building on the important achievements of preceding presidencies, with the aim of ensuring continuity in the g20 ’ s activities. just think, for example, of the growth strategies of