Leaning against the wind may boost shadow banking: BoE researchers
Shadow banks grow faster as monetary policy is tightened
Central banks should be wary of using monetary policy to counter financial booms, research published by the Bank of England (BoE) on Friday warns.
The working paper strikes a blow against those who favour central banks ‘leaning against the wind' – raising interest rates to resist financial imbalances, even if inflation is on target.
Former Riksbank board member Lars Svensson has been a vocal critic of leaning against the wind in Sweden; while others, including the Bank for International
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