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BIS Says Central Banks Out of Ammunition

by The "State" Team

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BIS Says Central Banks Are Out of Ammunition

In its annual report the Bank of International Settlements (BIS) said central banks in developed nations are confronting the limits of their ability to aid economic recovery as government efforts to strengthen their finances fall short.

The BIS reported that global central bank assets currently stand at $18 trillion. To put this into perspective, this represents about 30% of global GDP. This is double the ratio a decade ago.

The report also addressed issues in the banking system, noting that banks are in danger of a "vicious cycle" from the need to pledge more of their best quality assets as protections to central banks and other creditors, which could hinder the system's ability to absorb shocks.

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