Is the world heading for its third global financial crisis?

It's another grey day in Lima. The sunless sky hangs over Peru’s capital as a mist forms over the coastline. Across the city, there isn’t a gap in the clouds for miles. While storms almost never materialise, the weather during the International Monetary Fund’s latest annual meeting captures the gloomy mood.

This week, the fund said global growth this year would be the slowest since the Great Recession. A separate report by the fund warned that the world faced a “triad” of challenges that meant policy missteps could wipe a massive 3pc off global growth.

Corporate borrowers in emerging markets could default en masse when the US raised interest rates, it said. A new credit crunch, a fresh financial crisis: these were the risks facing the global economy.

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