BIS calls for European banking union and urgent fiscal reform in developed nations

Urgent fiscal reform and genuine efforts to create a banking union in Europe are vital to breaking the viscous linkage between banking and sovereign stress, says BIS

The Bank for International Settlements (BIS) has issued a strong call for governments around the world to act swiftly to address the root causes of the global financial crisis, including dealing with economic sector imbalances, excessive leverage, public over-indebtedness and over-burdened central banks. Only then is it likely sovereign bond yields in many countries will return to rates more typically associated with ‘risk-free' levels, the BIS said.

The BIS stressed the matter is urgent, adding