BIS’s Caruana warns of low interest rates risk
Jaime Caruana says low interest rates have created a ‘first-mover disadvantage’ that prevents rates rising and could fuel financial instability
The general manager of the Bank for International Settlements (BIS), Jaime Caruana, has called on policy-makers to avoid "financial protectionism", as countries maintain artificially low interest rates.
Caruana said interest rates in advanced and emerging economies had been persistently below real growth rates for at least 10 years. He suggested countries may have reached a stage where rates have become entrenched due to a "first-mover disadvantage", whereby no country wishes to be the first to
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