The Bank of Canada91裸聊视频檚 senior deputy governor says an explosion of global debt over the last decade is a top concern that she argues is holding back economic growth and creating vulnerabilities in the world91裸聊视频檚 financial system.

The global financial system is in better shape than it was in 2007 before the financial crisis, but unknowns such as ongoing U.S.-China trade tensions could knock things off course, Carolyn Wilkins said in a speech Thursday in Vancouver.

Wilkins also warned that high debt loads usually become an 91裸聊视频渁mplifying factor91裸聊视频� when it comes to an economic downturn.

The U.S.-China trade war and expanding global geopolitical unrest have been key worries for the Bank of Canada, she noted.

91裸聊视频淭he global development that concerns me the most, though, is rising debt,91裸聊视频� Wilkins said in her speech at an event hosted by the University of British Columbia91裸聊视频檚 economics department and CFA Society Vancouver.

91裸聊视频淲hether you91裸聊视频檙e a homeowner or a business person, you know first hand that high leverage can leave you in a vulnerable financial position. It91裸聊视频檚 no different for economies.

91裸聊视频淭he world has learned this lesson the hard way on many occasions in my lifetime.91裸聊视频�

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She said the combined global debt owed by governments, businesses and households now amounts to US$240 trillion, which is US$100 trillion higher than just before the financial crisis and more than three times the world91裸聊视频檚 gross domestic product.

Government debt, she added, has 91裸聊视频渟kyrocketed91裸聊视频� over the past 10 years, while corporate borrowing has 91裸聊视频渆xploded91裸聊视频� and now displays some risky qualities.

But some debt can be a good thing, she said.

For instance, Wilkins said limited accumulation of public-sector debt can help stimulate economic growth, depending on how it91裸聊视频檚 used, and companies can borrow as a way to invest in expanding their capacity.

Debt levels around the world piled higher largely because of the long stretch of extremely low borrowing rates that was necessary to help global growth build fresh momentum, she said.

91裸聊视频淭he downturn would have been even deeper and more painful without these decisive policy responses,91裸聊视频� Wilkins said.

91裸聊视频淲hat strikes me, though, is how much overall leverage has grown globally, even as the financial sector has repaired its books.91裸聊视频�

Canada91裸聊视频檚 high household debt, which is now more than 178 per cent of disposable income, is the central bank91裸聊视频檚 top domestic financial vulnerability, she said.

91裸聊视频淭he good news for Canadian businesses and households is that the financial system 91裸聊视频� globally and here at home 91裸聊视频� is safer than it was a decade ago thanks to much stronger safeguards,91裸聊视频� she said.

Wilkins added it91裸聊视频檚 important for policy-makers around the world to continue efforts to conduct stress tests on different parts of the financial system, and, when necessary, put in safeguards.

Andy Blatchford, The Canadian Press

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