{"id":4823,"date":"2015-01-25T08:14:12","date_gmt":"2015-01-25T13:14:12","guid":{"rendered":"http:\/\/olduvai.ca\/?p=4823"},"modified":"2015-01-25T08:14:12","modified_gmt":"2015-01-25T13:14:12","slug":"carney-says-qe-can-encourage-excessive-risk-taking-in-markets","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=4823","title":{"rendered":"Carney Says QE Can Encourage Excessive Risk-Taking in Markets"},"content":{"rendered":"<h3><a href=\"http:\/\/www.bloomberg.com\/news\/2015-01-24\/carney-says-qe-can-encourage-excessive-risk-taking-in-markets.html\" target=\"_blank\"><span class=\"Apple-style-span\">Carney Says QE Can Encourage Excessive Risk-Taking in Markets<\/span><\/a><\/h3>\n<p>Bank of England Governor Mark Carney warned easy monetary policy could prompt excessive risk-taking in financial markets.<\/p>\n<p>Two days after the European Central Bank announced a 1.1 trillion-euro ($1.23 trillion) quantitative-easing program, Carney said six years of sustained monetary stimulus was justified on an economic basis, yet could carry a downside if it overheated markets.<\/p>\n<p>\u201cIn an environment of low interest rates, and low interest rates for a period of time, and also quantitative easing, there can be excessive risk taking,\u201d Carney said during a Saturday panel at the\u00a0<a href=\"http:\/\/www.bloomberg.com\/davos\/\">World Economic Forum<\/a>\u2019s meeting in Davos, Switzerland. \u201cWhat those monetary policies are looking to do is move from an environment of reticence to take risk to responsible risk-taking. We\u2019re trying to avoid reckless risk-taking.\u201d<\/p>\n<p>Rock-bottom interest rates and asset-purchases have been deployed by central banks to drive their economies from recession and then ensure a recovery. The MSCI World Index has climbed almost 50 percent since the start of 2010 and bond yields have slid worldwide.<\/p>\n<p>\u201cQE creates in some markets some distortions,\u201d said BlackRock Inc. Chief Executive Officer Laurence Fink, who moderated the panel. \u201cIt moves huge volumes of money into the equity markets.\u201d<\/p>\n<h2>Liquidity Illusion<\/h2>\n<p>Carney said policy makers had taken steps to ensure financial stability and that investors should realize central banks won\u2019t come to the rescue when markets do slide and be alert to an \u201cillusion of liquidity.\u201d<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Carney Says QE Can Encourage Excessive Risk-Taking in Markets Bank of England Governor Mark Carney warned easy monetary policy could prompt excessive risk-taking in financial markets. Two days after the European Central Bank announced a 1.1 trillion-euro ($1.23 trillion) quantitative-easing program, Carney said six years of sustained monetary stimulus was justified on an economic basis, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[233,282,661,662,2874,889],"class_list":["post-4823","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ecb","tag-european-central-bank","tag-qe","tag-quantitative-easing","tag-risk-taking","tag-world-economic-forum"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4823"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4823\/revisions"}],"predecessor-version":[{"id":4824,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4823\/revisions\/4824"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}