The Bank for International Settlements (BIS), said in its annual report that the fight against the necessary deleveraging is far from over. It also highlights the lack of investment.
The Bank for International Settlements (BIS) has called for finding a "new compass" for public policy, emphasizing the need to tackle the debt, so that the global economy can return to the path of sustainable growth in its annual report published Sunday, June 29
Although the global economy has shown encouraging signs last year, growth remains in the shadow of the "Great financial crisis," she said.
Low investment
The Bank for International Settlements (BIS) has called for finding a "new compass" for public policy, emphasizing the need to tackle the debt, so that the global economy can return to the path of sustainable growth in its annual report published Sunday, June 29
Although the global economy has shown encouraging signs last year, growth remains in the shadow of the "Great financial crisis," she said.
Low investment
BIS, considered "the central bank of central banks," noted in particular the contrast between the euphoria that currently exists in the financial markets and the lack of investment in the real economy, even though macroeconomic and geopolitical perspective remains highly uncertain.
Accommodative monetary policies by central banks to support the stimulus effect in fed investor appetite for risky assets.
The consolidation of public and private finance is not completed
The economic reality is quite different, however, warned the BIS. The consolidation of public finances and private in countries that have been most affected by the crisis is not over. Vulnerabilities accumulate in those who were spared, especially in emerging countries have benefited in recent years from the abundance of cheap credit.
Restore lasting growth therefore requires implementing targeted policies, said the BIS, stressing the need to give to the debt the main engine of growth. "A new compass is greatly needed," said Claudio Borio, head of the Monetary and Economic Department of the BIS during a conference call.
The flexibility to get out of crises such as those of 2007-2008, caused by a disproportionate expansion of the financial cycle, is narrow. The effectiveness of traditional stimulus is reduced in particular by the accumulation of debt.
BIS therefore recommends focus on balance sheet repair and structural reforms rather than fiscal and monetary stimuli.
"The road may be long," insisted Claudio Borio, but considered that the current downturn in the global economy provides a "valuable opportunity that should not be wasted
Accommodative monetary policies by central banks to support the stimulus effect in fed investor appetite for risky assets.
The consolidation of public and private finance is not completed
The economic reality is quite different, however, warned the BIS. The consolidation of public finances and private in countries that have been most affected by the crisis is not over. Vulnerabilities accumulate in those who were spared, especially in emerging countries have benefited in recent years from the abundance of cheap credit.
Restore lasting growth therefore requires implementing targeted policies, said the BIS, stressing the need to give to the debt the main engine of growth. "A new compass is greatly needed," said Claudio Borio, head of the Monetary and Economic Department of the BIS during a conference call.
The flexibility to get out of crises such as those of 2007-2008, caused by a disproportionate expansion of the financial cycle, is narrow. The effectiveness of traditional stimulus is reduced in particular by the accumulation of debt.
BIS therefore recommends focus on balance sheet repair and structural reforms rather than fiscal and monetary stimuli.
"The road may be long," insisted Claudio Borio, but considered that the current downturn in the global economy provides a "valuable opportunity that should not be wasted
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