Borio: current account is a ‘badly inadequate' measure of financial risk

Policy-makers must shift attention from the current to the capital account when gauging the external performance of economies, as the present approach is "badly inadequate" and has "major implications for central banks," according to Claudio Borio and co-authors.

In a paper presented yesterday at a Norges Bank conference in Oslo, the head of the Bank for International Settlements' (BIS) monetary and economics department, along with co-authors Harold James and Hyun-Song Shin of Princeton