And experts are now warning that higher rates will push up the cost of servicing the world’s mammoth debts – with potentially devastating consequences.
King said it was essential to tackle the global debt pile – which stands at £166 trillion ($321t), according to the Washington-based Institute of International Finance.
“The areas of weakness in the current system are really focused on the amount of debt that exists – not just in the US and UK but across the world’ King said.
‘Debt in the private sector relative to GDP is higher now than it was in 2007 and of course public debt is even higher still’.
Although European and US banks have far larger reserves to draw on today – King warned banking disasters in less tightly regulated countries could create a global shock causing panic.
International Monetary Fund chief Christine Lagarde also sounded the alarm last month and researchers believe China is a danger.