Bank of Japan’s (BOJ) Deputy Governor Wakatabe on Thursday said that the central banks must remain vigilant and prepared for a possible future financial crisis at all times and should respond with vigorous expansionary macro policies in the event of a crisis.
Key quotes
Monitoring excessive risk-taking behavior, analyzing systemic risk in financial system play key roles in preventing financial crises.
If the policymakers’ response is inadequate or delayed, the economy will fall into deflation, struggle to emerge from it.
There are still discussions on the feasibility of tightening monetary policy as a pre-emptive step against a rise in asset prices.
Taking strong steps to burst bubble could push the economy into serious recession.
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