Bank warns of financial upheaval

THE Reserve Bank of Australia warned the current calm in financial markets could be the prelude to a storm that could wreak havoc in the world economy.

A further sharp rise in oil prices, the collapse of a major bank or an unexpected jump in inflation could send the increasingly fragile global financial system into meltdown, it said.

Like some other commentators such as The Economist the RBA regards the boom in markets for shares, bonds and housing in many countries as unsustainable.