Central banks should use low inflation as an opportunity to raise rates as part of a radical overhaul of their policymaking, the Bank for International Settlements has declared.
Low rates are entrenching debt dependency, storing up problems for the future and doing little to resolve the global economic malaise, the Swiss-based “bank of banks” said in its annual report.
The intervention is remarkable because the BIS, as the club for central banks from where global monetary and financial policy is co-ordinated, is hugely influential. It was also one of the few institutions to have warned in advance about the financial crisis.
Central banks have slashed rates and launched trillions of dollars of quantitative easing in an attempt to restore growth since the 2008 crisis, but