Matolcsy: The bubble behind all other bubbles

English2020. okt. 23.GOVERNOR MATOLCSY100WORDS

It is certainly worth sending out bubble-warnings and also questioning the likelihood for them to pop at the same time /Gillian Tett, FT, 9 October 2020/.

Banks, institutional investors, corporations, households, even governments are sitting on mountains of cash, financial resources and credit lines to invest and spend. These mountains of “cash and co.” were created by central banks in the aftermaths of the 2007/9 global financial crisis. Even new mountains are being born to handle the effects of the present pandemic.

We should not bet on a U-turn of major central bank’s monetary policies anytime soon: it would result in ending all other bubbles.

Governor Matolcsy, MNB, the Central Bank of Hungary

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