Domestic and global financial cycles have a tendency to interact and amplify one another, with monetary policy tending to make the problem worse, Claudio Borio argued in recent remarks.

The head of the Bank for International Settlements’ monetary and economic department said the two cycles moved at different speeds. The global cycle of expansions and contractions in gross capital flows and correlated asset prices tended to move at roughly the same pace as the business cycle, Borio told a