BIS: More Monetary Stimulus, More Problems

During the current economic downturn, governments have been slow to use the fiscal tools at their disposal, due to political obstruction and high debt levels. That leaves central banks as one of the only sources of stimulus and financial sector rescue.

In its recently released annual report, the Bank of International Settlements argues that continued dependence on the central bank actually entrenches the issues slowing down growth throughout the world.

Here’s their chart:

Central bank vicious cycle

Photo: Bank of International Settlements

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