BIS: debt now bigger problem than inflation 

The paper, 'Monetary and prudential policies at a crossroads', by BIS head of research and policy analysis Claudio Borio, says financial liberalisation, globalisation, and more effective inflation control by central banks, mean the main structural risk to the economy is now a more progressive build-up of financial imbalances, rather than sudden inflation-led shocks.

Borio’s paper recommends policymakers respond by ensuring more cautious behaviour during economic upswings, and by improving the measurement of system-wide risks. Monetary authorities may also need to tighten policy when financial imbalances build up, even if short-term inflationary pressures are subdued.

While the paper concludes many policymakers have moved in this direction, it emphasises that there is still more work to be done.

  • LinkedIn  
  • Save this article
  • Print this page  

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: