By Erik Oppers
This spring monetary policy is the talk of the town. It is everywhere you look, it’s unique, and you’ve never seen anything quite like it before: short-term interest rates at zero for several years running, and central bank balance sheets swelling with government bonds and other assets in the euro area Japan, the United Kingdom, and the United States.
But the meteoric rise of this once dusty topic can’t last. The end of these unconventional monetary policies will come and may pose threats to financial stability because of the length and breadth of their unprecedented reign. Policymakers should be alert to the risks and take gradual and predictable measures to address them.
Filed under: Advanced Economies, Economic outlook, Economic research, Fiscal policy, International Monetary Fund, Investment | Tagged: banks, bonds, central banks, credit, financial markets, financial stability, Global Financial Stability Report, IMF, iMFdirect, interest rates, International Monetary Fund, Japan, monetary policy, policy, United Kingdom, United States | 1 Comment »
