# Markets could face ‘sharp correction’, Bank of England warns
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-10-08
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Bank of England warns of potential sharp correction in
Meta Description: Bank of England warns of potential sharp corrections in financial markets if investors rethink prospects for recovery from COVID-19, citing increased
URL: https://financedigest.com/markets-could-face-sharp-correction-bank-of-england-warnshtml

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LONDON (Reuters) – The historically high value of financial assets could correct sharply if investors reassess the prospects for recovery from COVID-19, with signs of increased risk-taking at investment banks, the Bank of England said on Friday.

The BoE’s Financial Policy Committee (FPC) said in a statement there was evidence that risk-taking remained elevated in a number of financial markets relative to historic levels.

“Asset valuations could correct sharply if, for example, market participants re‐evaluate the prospects for growth, inflation or interest rates,” the statement said.

There are signs of continued loosening in underwriting standards and increased risk-taking in some [investment banking businesses.”](https://www.financedigest.com/credit-agricole-launches-china-ma-and-investment-banking-business.html "Credit Agricole launches China M&A and investment banking business")

(Reporting by Huw Jones and William Schomberg; editing by Sarah Young)


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