In World Economy News 11/11/2016
German Finance Minister Wolfgang Schaeuble urged continued implementation of steps taken to shore up banks after the 2008 financial crisis, and said debt levels should be lowered globally to strengthen the resilience of economies.
“In truth, we will have to work harder, slowly, carefully, to reduce the much-too-high public and private debt levels around the world,” Schaeuble told a banking conference. “Only through such a reduction will we be able to improve the resilience of our economies against shocks and crises.”
Global debt levels were now at the highest levels since World War Two, he said.
Schaeuble said he hoped interest rates would eventually increase, and said the high liquidity rates resulting from the loose monetary policy of all large central banks had allowed many countries to postpone urgently needed reforms.
“You can buy time that way, but the long-term growth prospects don’t get any better,” he told bankers at an event hosted by the Association of German Public Banks.
Schaeuble is a fierce critic of “ultra-loose monetary policy,” which includes the negative interest rates and other unconventional strategies of the European Central Bank aimed at jolting Europe out of extremely weak growth.
At the IMF’s semi-annual meetings in Washington last month, Schaeuble said the combination of a global overhang of public and private indebtedness and ultra-loose monetary policies posed risks to the global economy.
Source: Reuters (Reporting by Andrea Shalal; editing by Erik Kirschbaum)
