![]() ![]() regional banks including Silicon Valley Bank and then the emergency rescue of Credit Suisse in the BIS's own backyard. March and April saw a failure of a number of U.S. The Swiss-based BIS held its own annual meeting in recent days, where central bankers discussed the turbulent last few months. The world's top central bankers and other policymakers will gather in Sintra, Portugal on Monday for a three-day forum hosted by the European Central Bank. That is their job – to restore price stability," he told Reuters. "I think central banks will get inflation under control. If interest rates get to mid-1990s levels the overall debt service burden for top economies would, all else being equal, be the highest in history, Borio said. The longer inflation remains elevated, the stronger and prolonged the required policy tightening, the BIS report said, warning that the possibility of further problems in the banking sector was now "material". It is the first time that, across much of the world, a surge in inflation has co-existed with widespread financial vulnerabilities. Their challenges are unique by post-World War Two standards though. Fiscal policy must consolidate."Ĭlaudio Borio, the head of BIS's monetary and economics unit, added there was a risk an "inflationary psychology" was now setting in, although the bigger-than-expected rate hikes in Britain and Norway last week showed central banks were pushing "to get the job done" in terms of tackling the problem. Monetary policy must now restore price stability. "The time to obsessively pursue short term growth is past. Stern challenges must be addressed," Agustin Carstens, BIS general manager, said in the organisation's annual report published on Sunday. "The global economy is at a critical juncture. The world's central bank umbrella body, the Bank for International Settlements (BIS), called on Sunday for more interest rate hikes, warning the world economy was now at a crucial point as countries struggle to rein in inflation.ĭespite the relentless rise in rates over the last 18 months, inflation in many top economies remains stubbornly high, while the jump in borrowing costs triggered the most serious banking collapses since the financial crisis 15 years ago.
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