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Former Federal Reserve Chairman Yellen: Regulators lack tools to deal with new problems

November 09, 2018 00:21
source: Global Forex

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Former Federal Reserve Chairman Janet Yellen spoke at the New Economy Forum in Singapore on Wednesday (November 7). Yellen warned that with the risk of loans frombankMoving to a non-financial institution, the United States may have difficulty coping with various issues.

The letter pointed out that regulators lack sufficient tools to deal with new problems, and it is unclear whether the US has the appropriate tools to deal with emerging risks. Despite this, compared with a decade ago, the regulation of the United States and overseas has increased significantly.

On the second day of the opening of the forum, former US Treasury Secretary Hank Paulson issued a severe warning, saying that as both sides of China and the United States erected a wall, the "economic iron curtain" may appear. Paulson warned that taking a tougher stance may be counterproductive.

Paulson said, "In the process of isolating China, the United States may isolate itself."

The Sino-US economic confrontation is the recurring theme of the first day of the New Economic Forum. Henry Kissinger - he helped push the United States to resume diplomatic relations with China in the 1970s. He said that a broader conflict can be avoided, but he warned that failure will "destroy the hope of the world order."

Ravi Menon, managing director of the Monetary Authority of Singapore, also joined the Yellen team. He pointed out that the loose liquidity and expansionary policies of advanced economies have led to the accumulation of debt in emerging markets. While increasing dollar borrowing, these economies will face a stronger dollar andinterest rateThe risk of rising.

According to Huixin, Menon put forward some ideas for managing the spillover effects of global policy initiatives: regulatory coordination; monetary policy is guided by domestic tasks, but recognizes the impact on other countries; and the global financial safety net.

“If you have a global capital market, you need some form of global financial safety net, and this is very lacking,” Menon said. He called for a mechanism to prepare for a global dollar shortage, similar to the Fed. The dollar swap line during the 2008-09 crisis.

In terms of financial stability, Yellen believes that the outlook is “satisfactory,” but the new corporate debt represents a major new risk.

When it comes to the dollar, Yellen said that letting the dollar be used for international lending and becoming a safe haven is definitely good for global trade, but she warned that it was only because of low and stable inflation.

(Article source: Global Forex Network)

                (Editor: DF406)

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