Tax & Spend
Beware Market’s Sudden Wrath Over Debt, BIS Tells Governments
- Basel officials warn that confidence ‘could quickly crumble’
- ‘Things look sustainable until suddenly they no longer do’
The Bank for International Settlements.
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Indebted countries are vulnerable to a precipitous loss of confidence even though that risk is barely acknowledged in bond markets, the Bank for International Settlements warned.
The Basel-based institution said in its annual economic report released on Sunday that countries whose bloated fiscal positions are further stretched by higher interest rates should prioritize fiscal repair. Claudio Borio, head of the BIS’s monetary and economic department, said they must act “with urgency.”