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AAP
AAP
Business
Jacob Shteyman

Overheated share markets may risk financial meltdown

Overpriced markets, digital risks and geopolitical tensions are identified as economic worries. (Joel Carrett, Bianca De Marchi/AAP PHOTOS)

Global stock markets are likely underpricing heightened risks from geopolitical tension and cyber threats, leaving financial systems vulnerable to a violent correction, the Reserve Bank of Australia warns.

The central bank identified international shocks from stretched equity valuations, digital operational vulnerabilities and longstanding weakness in the Chinese system as the biggest threats to financial stability in its biannual review of the sector's resilience.

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