Sovereign-debt difficulties in Europe pose a threat to the euro and financial institutions in the region, said World Bank President Robert Zoellick.
“The world economy is entering a new danger zone this autumn,” Zoellick said in remarks prepared for a speech in Beijing today. “The financial crisis in Europe has become a sovereign debt crisis, with serious implications for the Monetary Union, banks and competitiveness of some countries.”
European sovereign default risk rose to a record yesterday after a report showed employment in the U.S. unexpectedly stagnated in August, adding to signs the global economic recovery is weakening. Stocks sank in August, sending the MSCI All-Country World Index down 7.5 percent for the biggest loss since May 2010.