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BIS Joins Chorus Saying Stock Valuations Are Looking ‘Frothy'

  • Says loose monetary policy is a key driver of asset prices
  • The central bank for central banks publishes quarterly review
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Calstrs CIO Says Stocks Are Like 'Sitting on Pin Cushion'

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The Bank for International Settlements added its voice to institutions questioning whether stocks have become too expensive, saying they look “frothy” -- particularly in the U.S.

The BIS weighed in on the debate just days after Goldman Sachs Group Inc. said a prolonged bull market across stocks, bonds and credit left its measure of average valuation at the highest since 1900. Stock prices are above historical averages and U.S. companies may struggle to continue their pace of dividend growth, the BIS said in its quarterly review on Sunday.