WASHINGTON • Caretakers of the global economy are getting the message that the world may not trust them as much as it used to.
"More and more people don't trust their elites. They don't trust their economic leaders and they don't trust their political leaders," German Finance Minister Wolfgang Schaeuble said on Thursday at the annual meetings of the International Monetary Fund (IMF) and the World Bank.
"Look all over advanced economies - the British referendum, the campaign in the United States. And if you look at Europe, I can tell you endless stories. There is a common denominator," he said.
Global finance chiefs and central bankers convening this week in Washington are coming to terms with a world roiled by public discontent over free trade, open markets and the cross-border movement of labour. The IMF has warned that rising tensions over globalisation are threatening to derail a world recovery already lacking a reliable growth engine.
The decision in June by British voters to leave the European Union highlighted opposition to immigration and trade. Now, similar frustrations are coming to a boil in the US presidential campaign, with Republican nominee Donald Trump looking to channel the anger of workers affected by trade with countries such as China and Mexico. Elections in Germany and France next year could be the next front.
Said World Bank president Jim Yong Kim: "The uncertainty around certain elections and political processes in the future is definitely a risk for the global economy."
Mr Schaeuble said the stakes are high in Europe. Fuelled by resentment over refugees from Syria, anti-immigration parties have recently gained ground in countries such as Austria, France and Germany.
The IMF has warned that rising tensions over globalisation are threatening to derail a world recovery already lacking a reliable growth engine.
Bank of England governor Mark Carney said on the panel with Mr Schaeuble in Washington that critics of globalisation often ignore the economic benefits of increased trade and integration, such as the prosperity that it has brought to emerging markets and developing countries.
"We should not apologise for hundreds of millions of people being lifted out of poverty, and the opportunities created. But there are challenges with distribution," he said.
The challenge lies in spreading the wealth more widely at a time when the global economy is stuck in low gear. The IMF this week left its global outlook unchanged, warning that risks remain tilted to the downside. Aside from protectionism, risks include stagnation in advanced economies, a slowdown in China and tightening credit in emerging markets.
The losses of Deutsche Bank are further complicating the puzzle for policymakers, who have been warned repeatedly of the eroding ability of central banks to boost growth, with interest rates already at or near rock bottom in most advanced economies.
The IMF warned this week that ultra-loose monetary policy is hurting financial institutions that rely on higher rates to turn a profit, such as banks and insurers.
The squeeze comes at a bad time for Deutsche Bank, which has struggled to reverse a slide in its share price amid concerns over whether it has sufficient capital to meet mounting legal costs.
Mr Yi Gang, deputy governor of the People's Bank of China, during Thursday's panel session, expressed optimism that the current surge of unrest over globalisation is only temporary.
"If you look at the long history, you see that this kind of phenomenon can only last for a few years," he said. "Maybe three years later, five years later, people will continue to build the consensus of free trade and globalisation. That is the correct direction."