(Bloomberg) -- Fragile markets, shadow lenders, international tensions and too many wars — global bankers gathering in Hong Kong were meant to discuss how they’re adapting to the financial world’s “complexity” and ended up dwelling on the potential for big blowups instead.

“My biggest fear is there’s one more geopolitical escalation and there’s a market event,” Deutsche Bank AG Chief Executive Officer Christian Sewing said at the Global Financial Leaders’ Investment Summit in Hong Kong on Tuesday.

At one of the largest gatherings of industry bosses since the Israel-Hamas war broke out last month, the mood on stage was dour as banking and investing chiefs traded observations and fears. The event, hosted by the Hong Kong Monetary Authority, aimed to explore the theme “Living with Complexity.” 

Bridgewater Associates co-Chief Investment Officer Bob Prince warned that markets are “under-discounting” how long interest-rate tightening in the US and Europe will last in the fight against inflation before an equilibrium is reached. Meanwhile, Citadel founder Ken Griffin said world leaders are already risking reigniting runaway prices.

Deglobalization is a “giant wild card,” Griffin said, urging listeners not to give up on investing in China. While economies have benefited from peace and globalization, “we don’t know what a world looks like that involves deglobalization,” Griffin said. That includes “how much that increases inflation systemically.”

The growth of shadow banking — typically referring to lending by money managers and other nonbanks to corporations and consumers — drew a few warnings. Roughly half of global financial assets are now in “the shadow sector,” UBS Group AG Chairman Colm Kelleher estimated.

“It’s a real cause of concern,” he said. “The next crisis, when it happens, will be in that sector. It’ll be a fiduciary crisis.”

About 300 executives are gathering in Hong Kong as part of the city’s effort to move beyond years of turmoil. The city has faced protests, pandemic lockdowns and ultimately job reductions, with tens of thousands of high-skilled people emigrating. More broadly, international investors and their money managers have been shifting funds out of mainland China.

The annual forum, now in its second year, is part of a broader effort to revive the hub’s status.

“Hong Kong is back in business,” Hong Kong Chief Executive John Lee told the audience at the outset on Tuesday. But at the same time, “the world today is more complex and challenging than ever.”

Potential disasters weren’t the only topic, but they were ample and wide-ranging.

“We absolutely have to worry about what’s happening with deficits in the US,” Goldman Sachs Group Inc. CEO David Solomon said. He pointed to the growing size of the nation’s debt, as well as the potential cost of refinancing in a different — less liquid — environment.

The trouble is that big disruptions are often caused by unforeseen forces, said Morgan Stanley’s longtime leader James Gorman, who is preparing to step down as CEO at the end of this year. 

Potential causes could include politics or geopolitics, he said. 

But then again, Gorman added, “nobody in this room predicted Covid.”

--With assistance from Kiuyan Wong, Lisa Du and Denise Wee.

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