The Bank of International Settlements (BIS), widely known as the Central Bank to Central Banks, released their quarterly review on the March 5. The Institution is more widely known for setting BASEL standards. Claudio Bario and Hyun Song Shin remarked at a press conference following the release. They are the Head of the Monetary and Economic Department and Economic Advisor and Head of Research respectively, at the BIS.
Claudio Bario noted that markets were still impacted by the “Great Financial Crisis.” He noted that financial institutions still “window dress” their accounts around reporting periods. He however, went on to state that companies are now wearier of extending their balance sheets. He was happy to see a decline in aggressive risk-taking and over extension.
Hyun Song Shin commented on market rigging and the need for reliable benchmarks in the industry. He commented on the LIBOR scandal and how a bad reference rate could have an impact on many other prices within the economy.
He spoke of conceptual difficulties with setting a benchmark. He mentioned that emerging markets rely on foreign banks for financing. Shin ended his remarks commenting on the role of the UK. He noted the key role of the United Kingdom as the gateway to the euro area financial system for investors outside the euro area.
The overview of the report comments on various global economic trends. It also comments on the more accommodative signals by Central Banks in major economies. The overview went on to point at the fragile global growth. The overview noted that “Policymakers eased monetary and fiscal policy even as they sought to steer credit growth away from the shadow banking sector.”
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