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BIS Warns Central Banks That Policy Caution Has Its Perils Too

  • Outgoing general manager Jaime Caruana speaks in interview
  • Markets are too complacent, leading to excessive risk-taking

Central banks concerned about the effects of raising rates too fast shouldn’t underestimate the risks of delaying action, the general manager of the Bank for International Settlements said.

“Postponing normalization too much also has risks,” Jaime Caruana, whose term at the head of the central banks’ central bank expires on Thursday, said in an interview last week at the BIS headquarters in Basel. “Why? Because there is more risk-taking and it’s difficult to know where the risk-taking will go.”