The budget crises facing the Eurozone and United States mean there are no longer any “absolutely safe investments,” the head of the leading global reinsurer Munich Re told a German newspaper.
“Absolutely safe investments, which we had been accustomed to for years, no longer exist”, Nikolaus von Bomhard told Sueddeutsche Zeitung in an interview to be published on Monday.
“A state bond is no longer what it used to be — a safe investment in all respects,” said Bomhard, who manages 200 billion euros ($288 billion) in assets. Bomhard also warned that Europe would not be able to sustain further crises.
“Europe cannot bear new crises and new remedies to crisis” such as the efforts made to sustain the Greek economy, he said.
He also said he was worried by the failure to reach a deal on raising the US debt ceiling.
“We could still bear a partial payment default of the United States. But in any case this will cause us headaches because of the domino effect it would trigger,” he said.
Berlin, July 31, 2011 (AFP)