Mohamed A. El-Erian , Columnist

As Central Banks Meet, Japan's Faces the Toughest Dilemma

After trying negative interest rates, few tools remain for bolstering the economy.

June 14, 2016 at 6:00 AM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

Expecting asset purchases.
Photographer: Kazuhiro Nogi/AFP/Getty Images

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As central banks in advanced economies -- including the Bank of England, the Bank of Japan, the Swiss National Bank and the U.S. Federal Reserve -- hold policy their meetings this week, they will all confront tricky questions about the management of national liquidity and cross-border influences.

The most fascinating discussion, however, will take place at the Bank of Japan, which has an additional challenge: It has moved closest to the line that separates effective policy measures from ineffective and counterproductive ones, and it may even have already crossed that line.