Economics
Central Banks Told Not to Be Afraid of Shaking Markets a Little
- BIS’s Borio says officials must accept bumpy normalization
- Remarks contrast with views of former Treasury head Summers
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Central banks should accept that reversing crisis-era monetary policy will be “bumpy” and shouldn’t delay doing so just for fear of upsetting financial markets, according to the Bank for International Settlements.
Claudio Borio, who heads the institution’s economics department, urged policy makers to press ahead, both to address financial stability risks and to insulate their economies against the next downturn. The BIS is effectively a bank for central banks.