BASEL, SWITZERLAND – The Bank for International Settlements has called on advanced economies, including Japan, the United States and the European Union, to promote fiscal and economic structural reforms and labor market overhauls, instead of further depending on aggressive monetary easing.
“The phrase ‘whatever it takes’ has become a rallying cry for central banks to continue their extraordinary actions,” the BIS said in its annual report published Sunday..
But the BIS stressed that monetary easing alone cannot achieve fiscal reconstruction and economic structural reforms.
“We are past the height of the crisis, and the goal of policy has changed — to return still-sluggish economies to strong and sustainable growth,” the report said.
Central banks cannot repair the balance sheets of households and financial institutions or ensure the sustainability of fiscal finances, it said, adding, “Most of all, central banks cannot enact the structural economic and financial reforms needed to return economies to the real growth paths authorities and their publics both want and expect.”