RBA’s John Simon says low rate a ‘poor predictor’ of crises

RBA's Simon: Low policy rates "do not show up as a reliable indicator" of financial crisis

Low interest rates are not "inherently risky or destabilising" in their own right, the head of economic research at the Reserve Bank of Australia (RBA) said in a speech today (October 8).

Low interest rates, with strong growth rates and inadequate prudential supervision, had contributed to the global financial crisis, said John Simon in a speech in Sydney. But a review of economic history showed low interest rates were the international norm in most countries before the 1970s, without leading to

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