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Carney Says QE Can Encourage Excessive Risk-Taking in Markets 

January 26, 2015

Simon Kennedy and Scott Hamilton, Bloomberg 

Bank of England Governor Mark Carney warned easy monetary policy could prompt excessive risk-taking in financial markets.

Two days after the European Central Bank announced a 1.1 trillion-euro ($1.23 trillion) quantitative-easing program, Carney said six years of sustained monetary stimulus was justified on an economic basis, yet could carry a downside if it overheated markets.

“In an environment of low interest rates, and low interest rates for a period of time, and also quantitative easing, there can be excessive risk taking,” Carney said during a Saturday panel at the World Economic Forum’s meeting in Davos, Switzerland. “What those monetary policies are looking to do is move from an environment of reticence to take risk to responsible risk-taking. We’re trying to avoid reckless risk-taking.”

Read More: Bloomberg

 
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