Policy Makers Should Lower Funding Risks for Banks, BIS Says

Policy makers should act to minimize the impact of sovereign credit risk on banks to safeguard their access to funds, the Bank for International Settlements said.

“The financial crisis and economic recession, and policy makers’ responses to these events, have raised sovereign credit risk concerns in a number of advanced economies,” the Switzerland-based BIS said in a Quarterly Review released today. “This has increased the cost and reduced the stability of funding for banks.”