BIS's Caruana: "The narrow path ahead"
01 July 2009
"A key modification to financial frameworks involves strengthening the macro-prudential orientation of financial regulation and supervision”, Caruana said and called for close attention to sustainability and exit strategies.
"The path to a self-sustaining recovery is narrow and fraught with risks", BIS General Manager Jaime Caruana said. Policymakers need to facilitate the necessary adjustments in the financial system and the real economy while cushioning the impact of those adjustments on growth and employment.
"A key modification to financial frameworks involves strengthening the macro-prudential orientation of financial regulation and supervision”, he underlined. Policymakers need to facilitate the necessary adjustments in the financial system and the real economy while cushioning the impact of those adjustments on growth and employment.
"This calls for close attention to sustainability and exit strategies", he said. Complementary modifications to both financial and macro-economic policy "frameworks are needed to limit the risk that such a costly event ever recurs".
“Pursuing the agenda of rescue, recovery and reform calls for great perseverance, patience and determination. The times ahead may be particularly difficult. Recent signs of protectionism and increased home bias – sometimes an unintended consequence of national support for the financial sector – highlight the dangers ahead” he concluded.
© BIS - Bank for International Settlements
