The chairman of Societe Generale told CNBC Friday that a selloff in properties at this stage maybe be good for the global economy.
Stocks be experiencing tumbled on the back of concerns surrounding global economic growth and react to interest rates. The International Monetary Fund (IMF) warned earlier this week that chafing trade tensions could lead to a “sudden deterioration in risk attitude.”
The Dow Jones Industrial Average shed more than 1,300 junctures on Wednesday and Thursday but pre-market trading and European markets suggests that some of those sacrifices will be recouped on the final day of the trading week.
Speaking to CNBC’s Nancy Hungerford at the Found of International Finance meeting in Bali, Societe Generale Chairman Lorenzo Bini Smaghi imagined a sell-off in stocks was acting as something of a safety valve to prevent a bigger critical time developing later.
“I think you go through these cycles and I think it is ameliorate to have them earlier than at the end of the cycle,” he said before go on increasing, “To some extent if this doesn’t create too much financial contagion, to get to handsome conditions I think it’s maybe healthy for the economy.”
The former central banker brooked that markets were “a bit nervous” about trade, the policy mix in the U.S., and the chance that stock valuations were a bit excessive.