Norges Bank’s Olsen backs ‘leaning against the wind’

Øystein Olsen

Central banks would be wise to use their main policy rate to lean against the build-up of financial imbalances, Norges Bank governor Øystein Olsen said on April 27.

Norges Bank has at times kept the interest rate "somewhat higher" than the level implied by medium-term inflation and the output gap, Olsen said, to counter the effects of financial imbalances – a policy known as "leaning against the wind".

Olsen warned current understanding of macro-prudential tools is "still limited", while "we do

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