Tuesday, 28 June 2011
World central bank wary of the financial crisis risks
BANK world's leading center issued a warning to investors to be willing to accept smaller profit margins due to actions of the bank refuses a loan fund in preparation to avoid another financial crisis. They are also advised banks around the world about the need to raise interest rates to ensure inflation under control.
Bank for International Settlements (BIS) said the new rules for banks saw their capital buffers increase gradually in order to provide returns that can be expected and smaller.
However, the BIS, the main organization to monitor other major central banks, said in its annual report that the bank managers and shareholders perform the modification, as expected. He said that interest rates may go up because of global monetary policy is needed in order to withstand strict inflation pressure and avoid the risk of financial stability. General Manager of the bank, Jaime Caruana, said the global financial crisis that occurred in 2008-2009 still haunt the world, but there are signs that the return of excessive risk-taking happen again. He warned that the threat of unsustainable public debt , commodity and energy prices are soaring and inflation is already threatening many countries. "Although encouraged investors to take risks is part of crisis management, but there is a possibility of some event, they will cross more than they should," he said. He said, the problem more fiscal appear on the European countries owe in large scale, such as Portugal, Greece and Ireland, the other major economies also need to carefully and quickly improve their position in order to avoid another global crisis. "I see a need to increase the monetary policy appropriate level, "he told reporters in Basel, Switzerland. Globally, short-term interest rates have shown a negative reading with sharply since last year. Raise interest rates to reasonable levels to reduce excessive risk-taking incentives and support necessary restructuring and adjustment in the balance sheet.