29 Jan 2013

Higher borrowing costs possible - analyst

7:26 am on 29 January 2013

A financial analyst is warning higher global funding costs cannot be ruled out if there are further shocks in Europe and the United States.

Harbour Asset Management head of fixed interest Christian Hawkesby says credit for countries and banks has become cheaper in the last six months due to action by the European Central Bank to save the euro and strengthen banks' financial positions.

At the World Economic Forum in Davos last week, political and business leaders expressed cautious optimism that the worst of the financial crisis was over.

Mr Hawkesby agrees with this assessment but says risks remain that could trip up the recovery.

"It still is a challenging environment in Europe, and there are still risks there that could emerge," he says.