General Manager's speech: Taking a longer-term perspective

Speech and presentation of the key messages of the BIS Annual Report delivered by Mr Jaime Caruana, General Manager of the BIS, on the occasion of the Bank's Annual General Meeting, Basel, 28 June 2015.

The speech highlights four observations from the Annual Report. All of them derive from taking a longer-term perspective that highlights the role of financial and global factors. Persistent unusually low interest rates are not inevitable: they should not be accepted as the new normal. It is important to recognise the long-term damage that financial booms and busts do to productivity growth, mainly by misallocating resources. Persistent very low rates pose risks to the financial sector's strength. And the blind spot of the current international monetary and financial system is its inability to constrain the build-up and transmission of financial imbalances. Fully developing this longer-term perspective and translating its insights into policymaking will require deeper analysis and closer international cooperation.