AI bubble is the biggest risk for global markets, says Julius Baer CEO
Stefan Bollinger stated that while banks remain safe, investors may be getting carried away by the artificial intelligence boom.
Julius Baer CEO Stefan Bollinger said the biggest risk to global markets is an AI bubble, as investors get carried away by the boom, according to The Economic Times.
Bollinger noted that the likelihood of a future crisis originating from a banking crisis is very low because banks are secure. He suggested a crisis is more likely to emerge from off-balance sheet commitments within the AI ecosystem where reported numbers are high.
Regarding India, Bollinger said the correction in equity valuations from 21-22 times earnings to 16-16.5 times is healthy. He added that the country's growth story remains intact.
The CEO also observed that offshore investments for wealthy Indians have risen from 2-5 per cent of their wealth to 15-20 per cent over the last five years.
On global trends, Bollinger mentioned that hedge funds are gaining focus and private credit remains an interesting asset class. He also noted that Japanese investors are reconsidering overseas allocations as interest rates rise in Japan.