BIS Warnings

The BIS has published its annual report and warns that the “unthinkable threatens to become routine.” In the press release the Bank argues that

[a]ddressing these deficiencies calls for “a triple rebalancing in national and international policy frameworks”, towards policies that pay greater attention to the medium term, to financial factors and to the costly interplay of domestic-focused decisions. … An essential element of this rebalancing is to rely less on demand management policies and more on structural ones, so as to abandon the debt-fuelled growth model that has acted as a political and social substitute for productivity-enhancing reforms.