BIS remains concerned about economic prospects
Jun 30, 2009 Make Money Online
One major financial organization is said to be suggesting that financial products could be regulated like drugs in order to reduce the chance of future bouts of market instability.
A Reuters report features a proposal from the Bank for International Settlements that would categorize various financial products by how accessible they should be to investors.
For example, the wire service cites four proposed categories which would start with the safest financial products that anybody could invest in. From there, a second tier would be imposed that would require investors to have authorization, comparable to prescription drugs, while a third tier would be open to certain pre-screened investors and institutional investors, while a fourth category of such products would be completely illegal.
Reuters notes that the plan is motivated in part by concern that current early signs of an economic recovery may not actually take hold in the longer term.
Elsewhere, Bloomberg News reports that the BIS is also concerned that central banks will fail to raise interest rates as quickly as they could, thereby raising the risk of inflation. The news organization quotes the BIS as saying that “a nearly catastrophic crisis” has left many central banks fearful of reversing their downward trend on interest rates, which would result in them acting too late.
—By Steve Monfort—
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Tags: Bank for International Settlements, BIS, Bloomberg News, catastrophic crisis, central bank, Financial, Forex, Interest Rate, invest, prescription drugs, Stock
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