Rate hikes and financial stability can coexist – IMF panel
Policy-makers can ease lenders’ stress with short-term liquidity when tightening policy, say speakers
Central banks could avoid the trade-offs between price and financial stability if they deployed specific and temporary tools to address lenders’ liquidity stresses, panellists at an International Monetary Fund event have said.
Speaking on April 23 during the IMF Spring Meetings, Pierre-Olivier Gourinchas, the institution’s chief economist, noted that rapid monetary tightening could place significant financial stress on lenders.
Drawing on an IMF staff discussion note, Gourinchas said this
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