BIS’s Borio on the paradox of financial instability
Claudio Borio, the deputy head of the monetary and economic department of the Bank for International Settlements, cautioned future policymakers to beware the "paradox of financial instability".
In a speech delivered on 22 July, Borio noted that the system looks strongest precisely when it is most vulnerable. "What looks like low risk is, in fact, a sign of aggressive risk taking," he said, referring to the fact that high credit growth and asset prices are often tied with low risk premia
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