Ace Finance Desk – The World is Facing a New Credit Crunch and that borrowing is now colliding with tremendous demand from the private sector, much of it from technology companies Szu Ping Chan: Economics Editor

With 785 apartments demanding rents of $4,200 (£3,181) a month, Los Angeles’ 64-storey skyscraper the Beaudry sounds like a property developer’s dream. So why did its owner choose to hand back the keys?

Brookfield, the Canadian company that built the tower, decided last month that walking away made more sense than refinancing the $360m loan attached to it. It’s a cautionary tale about a global financial system being tested to its limits.

For almost two decades, money was cheap. In the wake of the 2008 financial crisis and the credit crunch it triggered, central banks around the world slashed interest rates to close to zero. Easy borrowing kept economies afloat.

But in recent years, that reality has been shattered. Inflation has come roaring back in the wake of energy shocks and wars, sending interest rates soaring. At the same time, governments have borrowed heavily to fund ballooning spending. Add into the pot AI companies spending historic sums, and you have a dangerous cocktail.

” Governments across the developed world are running huge deficits,” Larry Fink, the boss of BlackRock, said last month. “

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