Bank of Israel director says central banks can 'overdo' liquidity

andrew-abir

There is "a fine line" between central banks providing sufficient liquidity to markets during a financial crisis, and "overdoing it" and preventing them from being able to function normally, according to Andrew Abir, the Bank of Israel's director of market operations.

Central banks stepped in to provide liquidity at a time when markets were broken, and not to have done so "would have been almost disastrous", he said. "The cost of that is some markets are finding it difficult to go back to normal

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