Top banker calls for global reforms

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COUNTRIES across the world need to unwind expansive monetary policies and put more emphasis on reforming and repairing their economies, according to the head of the Bank for International Settlements.

Jaime Caruana, head of the “central banks’ central bank”, said the outlook for the global economy had brightened and policy makers should seize the chance this afforded them to shape up their economies to lift productivity.

“We need to continue to normalize monetary policy and put more attention on the other side of the policy equation, that is, reforms and repairs,” Mr Caruana said at the World Economic Forum in Davos, Switzerland.

Advanced economies “are doing better” and emerging markets would continue to grow, he said, “though perhaps not with the same dynamism as in the past few years”. “It’s a better outlook,” he said of the global economy.

But he also called for structural reforms and bank balance sheet repairs.

The US decision to start “tapering” its stimulus will dominate the global economy this year.