Liang Tao, vice chairman of the China Banking Regulatory Commission, said that the accelerated divergence of global monetary policy may cause the re-pricing of global financial assets, and even cause the bursting of asset bubbles.
Liang Tao said, in developed economies adhere to low interest rate policy at the same time, some emerging economies recently also immediately announced interest rate hikes, the current global monetary policy divergence in the tone of easing accelerated, the Western developed economies policy easing unprecedented magnitude, the independence of decision-making has significantly decreased, the means tools break through the traditional bottom line.
In his view, this phenomenon not only leads to fiscal sustainability risks, but also generates huge spillover effects, pushing up the scale of global debt, pushing up financial market bubbles and inflationary expectations. In addition, along with the recovery of the real economy, market inflation expectations and monetary policy shifts in developed countries are expected to heat up, financial market volatility has increased and vulnerability has risen.
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