ZURICH: The world’s central banks have done their job in offering breathing-space during the financial crisis, but government and business has been too slow with much-needed reforms to boost productivity, the Bank for International Settlements said on late Sunday.
The Swiss-based BIS—dubbed the central bankers’ central bank—said in its annual report that a “forceful program” of “repair and reform” was the only way to ensure a genuine economic revival.
“Although six years have passed since the eruption of the global financial crisis, robust, self-sustaining growth still eludes the global economy,” the BIS said in a statement.
“During this time, central banks in advanced economies have been forced to look for ways to increase their degree of accommodation. But central banks cannot solve the structural problems that are preventing a return to strong and sustainable growth,” it underlined.
After the crisis struck, central banks moved to stoke flagging economies by easing monetary policy, for example slashing interest rates and increasing their balance sheets.
“What central bank accommodation has done during the recovery is to borrow time for others to act, allowing them to repair balance sheets, to consolidate fiscal balances, and to enact reforms to restore productivity growth,” said Stephen Cecchetti, head of the BIS Monetary and Economic Department.