World is not running out of safe assets – BIS’s McCauley

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The world’s supply of safe assets is keeping up with demand, the Bank for International Settlements’ Robert McCauley says in a new paper, challenging conventional narratives of the US’s role as global liquidity supplier.

A widely-accepted narrative, as McCauley notes in the working paper, is that the US economy is shrinking as a percentage of global output, while emerging markets grow faster and demand ever more dollar-denominated assets for their reserves. To meet such demand, the US debt-to

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