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This article was published on 6 March 2016 at 13:47.
the last change is the March 6, 2016 at 16:02.
For the first time the confidence of the markets in the healing ability of central banks is coming and less. A worrying sign that – despite the settling of the Stock Exchange in the last three weeks – could herald a new turmoil in the future. The warning was launched by the Bank for International Settlements (BIS), the organization based in Basel which promotes cooperation between central banks.
“What we see may not be isolated lightning, but the signs of a nearby storm, which is preparing for a long time – warns Claudio Borio, head of the head of department of monetary Bri, illustrating the quarterly report – Despite exceptionally expansionary monetary conditions, growth in the most important areas has been disappointing and inflation remained low. Market participants have taken notice and their trust in the healing powers of central banks – perhaps for the first time – falters. Even policymakers would do well to take note. “
The Bri also cites data confirming the ongoing tensions in the markets: in the last quarter of 2015 the amount of international debt securities has accused the major decline for three years, with repayments that exceeded new issues of 47 billion. The decline is mainly due to the scarcity of new bond issues by banks in advanced economies. A spy who could herald a gradual drying up of sources of funding.
It was “inevitable that tensions between the quiet of the markets and the underlying economic vulnerabilities should get to a point of resolution. In the recent quarter we have witnessed the beginning of this phase of resolution – notes Claudio Borio – the apprehension grew and spread following the Bank of Japan’s decision to adopt negative rates. In the apex point, they have been negotiated with negative returns over 6,500 billion dollars of government bonds, extending once again the boundaries of the unthinkable. In the face of a prolonged decline in productivity growth, exacerbated by the crisis, global debt levels have continued to rise and margins of policy intervention have become increasingly close: a set of factors – concludes the economist – we could define the three loose cannons’ which affect the future of the markets.
the warning a few days before the expected arrival Governing Council of the European central Bank should launch new stimulus for the economy miusre an anti-deflation. Among these, market participants expect a new cut in interest rates on deposits that commercial banks Eurozone “parked” on a daily basis to the ECB. Practices currently the rate is already negative (-0.30%) and could fall to -0.40 for cento.Anche this care, if continued over time, according to the BIS could prove risky. “There is great uncertainty – warns the Bri – on private behavior and institutions if rates were to fall further into negative territory, or if they were to remain negative for a long time.”
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