IMD World Competitiveness Centre director and professor of finance Arturo Bris said another crisis for the global economy is likely to occur and not enough action is being taken to avoid it.
Mr Bris said one cause is the way in which the stock markets have performed unrealistically well, adding that at some point, the “stock market bubble” will “explode”.
“In 2014, analysts were disappointed in the first quarter because earnings were not in line with market expectations,” said Mr Bris.
“This means that if markets were to revert to a reasonable level with regard to earnings, there will be a stock market drop of between 30 and 35 per cent,” he said.
Mr Bris said that a “severe crisis” could also be driven by growing Chinese shadow banking, a system which consists of loans mainly to government institutions whose performance is not well monitored.
“If this system collapses, it will negatively affect the global economy,” Mr Bris explained.
Mr Bris also said there is a risk of a “property bubble forming” in countries like Brazil, China, Canada or Germany, which could also be a contributing factor.
“Prices are going up because availability of credit is huge and buyers are pushing prices up without realising that they do not correspond to fundamental values,” said Mr Bris.
“Economies seem to be finally rebounding since the 2008 crisis [but] we shouldn’t be complacent,” he added.
