The Bank for International Settlements (BIS) issued a warning today that unless global interest rates rise asset bubbles could threaten the global economy. In some emerging markets property values are expanding at a torrid pace and are pushing prices to unsustainable levels.
“The prolonged period of very low interest rates entails the risk of creating serious financial distortions, misallocations of resources and delay in the necessary deleveraging in those advanced countries most affected by the crisis,” the BIS said in its annual report.
“Tighter global monetary policy is needed in order to contain inflation pressures and ward off financial stability risks,” it said.
Source: BBC News