Aberdeen's Docherty warns QE2 could cause second credit crunch

A further bout of quantitative easing could plunge the West into a second credit crunch, Aberdeen head of global equities Stephen Docherty warns.

The Bank of England has hinted at a second round of QE later this year, and Docherty suspects this would drive equity markets higher. However, it could also prompt borrowers to increase their leverage, potentially forcing the UK into a second credit crunch. Docherty says there is still a high amount of leverage in the UK and US and the easy access to cash could lead banks to once again take extreme risks. "Quantitative easing is not a sustainable way to grow the economy. Central banks have become fixated with growth and have not accepted that leverage is still high," he says. "T...