USEUROPEAFRICAASIA 中文双语Français
Home / World

Endgame for monetary policies

By Otaviano Canuto | China Daily | Updated: 2013-03-15 07:18

Global efforts needed to invest the liquidity generated by advanced economies in long-term productive assets

Much of the hype surrounding last month's meeting of the G20 finance ministers and central bankers in Moscow was dedicated to so-called currency wars. But the crucial issue of long-term investment financing was largely neglected, even though the endgame for the unconventional monetary policies introduced by some advanced economies will require the revitalization or creation of new long-term assets and liabilities in the global economy.

The collapse of Lehman Brothers in 2008 drove up risk premia and triggered panic in financial markets, weakened assets in the United States and elsewhere, and threatened to provoke a credit crunch. In order to avoid fire sales of assets, which would have led to the disorderly unraveling of private-sector balance sheets - possibly triggering a new Great Depression or even bringing down the eurozone - the central banks in the advanced countries began to purchase risky assets and to increase lending to financial institutions, thus expanding the money supply.

Endgame for monetary policies

Today's Top News

Editor's picks

Most Viewed

Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US