BOE’s Haldane Says Mispriced Assets May Pose Stability Risk

Andrew Haldane, executive director for financial stability at the Bank of England, said officials may need to monitor assets to assess risks posed by mispricing.

“Modulating the price of risk, when this is materially mispriced, could be every bit as important as controlling its quantity,” he said in a speech in London today. “This is the next frontier for macroprudential policy -- whether, and if so how best, to moderate excessive swings in risk premia across financial markets which risk damaging the financial system or wider economy.”