Carstens warns QE strengthens ‘fiscal-monetary nexus’

Agustín Carstens
Agustín Carstens
Photo: BIS

Central banks with quantitative easing programmes are creating a stronger “fiscal-monetary nexus”, the Bank for International Settlements’ head Agustín Carstens said on October 8.

Recent asset purchases have led major central banks to buy a significant portion of governments’ new debt issuance, the BIS general manager noted in remarks at a conference. This is creating closer ties between central banks and governments, he warned, and could lead to fiscal dominance.

“The experience of many Latin

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