IMF's Blanchard warns macro-prudential tools ‘may not be up to the task'

blanchard

Macro-prudential regulation "may not be up to the task" of ensuring financial market stability after years of record-low interest rates have potentially made yield-seeking investors "complacent about the future", Olivier Blanchard, the IMF's chief economist, warned today.

"One should not overplay these risks, but, clearly, policy-makers should be on the lookout. Macro-prudential tools are the right instruments, but one has to worry that they may not be up to the task," Blanchard said.

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