BERLIN – A body that represents many of the world’s top central banks says policymakers should be mindful of the risks of maintaining ultra-loose monetary policies too long.
The Bank for International Settlements, a Switzerland-based organization, said in its annual report Sunday that changing course will raise “significant challenges.”
It says central banks will have to strike a balance between the risks of switching policy prematurely and those associated with delay.
While the former are well understood, the BIS says it’s important “not to be complacent” about the latter just because they have yet to materialize. Rising inflation is often identified a key risk of keeping policy loose for too long.
Last week, the U.S. Federal Reserve said it could start reining in its bond-buying program this year. England