Concerns about asset bubbles prompt central bankers to act

10/26/2009 | Bloomberg

Central bankers around the world are trying to avoid the types of policy mistakes that led to speculative bubbles and eventually to the global financial crisis. They are giving more weight to accelerating asset prices as they consider monetary policy moves. For example, when the Reserve Bank of Australia increased interest rates a few weeks ago, Governor Glenn Stevens cited increasingly expensive real estate as a reason for the change. Central banks "will be very wary as property and equity prices start to boom," said Stephen Cecchetti of the Bank for International Settlements. "They will worry about it much more actively and they'll do that around the world."

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