Global safe assets
AbstractWill the world run out of 'safe assets' and what would be the consequences on global financial stability? We argue that in a world with competing private stores of value, the global economic system tends to favor the riskiest ones. Privately produced stores of value cannot provide sufficient insurance against global shocks. Only public safe assets may, if appropriately supported by monetary policy. We draw some implications for the global financial system.
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Bibliographic InfoPaper provided by Bank for International Settlements in its series BIS Working Papers with number 399.
Length: 68 pages
Date of creation: Dec 2012
Date of revision:
safe assets; dollar; euro; liquidity trap; government debt crisis;
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