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News Link • Economy - International

Central Bankers Warn of Asset Bubbles

• dailybell.com

Sweden Shows Central Bankers How to Fight Next Asset Bubble ... Riksbank Governor Stefan Ingves has raised the repo rate four times since July even as inflation remains below the bank's 2 percent target. House prices in Sweden jumped an annual 7 percent in the three months through July, the 15th consecutive period of increases. Sweden's central bank may set the direction for other policy makers as it looks beyond conventional inflation targets to asset-price growth in an effort to prevent the next bubble. "Not countering asset-price increases has been the conventional wisdom among central banks, but what has it actually resulted in?" said Tina Mortensen, an economist at Citigroup Inc. in London. "Surely the current crisis has made central bankers rethink policy; Sweden is actually facing this problem" because "asset prices and monetary policy are a hot topic," she said. – Bloomberg

Dominant Social Theme: Responsible bankers are concerned – and may have a solution.

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