Caruana defends role of interest rates in ‘leaning against' financial cycles
Even small interest rate rises when "applied persistently" can discourage excessive indebtedness by reducing the under-pricing of risk, BIS general manager Jaime Caruana said today, firing a new salvo in defence of the use of monetary policy in promoting financial stability.
Speaking at a conference in Sofia marking the 135th anniversary of the Bulgarian National Bank, Caruana said financial cycles "require a symmetric policy of leaning against it as well as cleaning up after it", while
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