DAVOS, Switzerland, Jan 24 (Reuters) – Central banks are
coming under too much pressure from politicians to act to
promote growth and weaken currencies, the head of the world’s
central banking forum said on Thursday.
Jaime Caruana, general manager of the Bank for International
Settlements, also said in a Reuters Insider television interview
that the world was reaching the point where the damage from
central banks’ printing money could outweigh the benefits.
Asked about pressure from the new Tokyo government on the
Bank of Japan to increase asset purchases to drag the economy
out of its fourth recession since 2000 and end deflation, he
said authorities should focus more on their own actions.
“There is always a risk of overburdening central banks.
There is perhaps excessive pressure when we discuss about
growth; probably the attention should be focusing on
productivity, competitiveness, labour market participation.
There is a bit too much focus on central banks,” Caruana said.
Central bank measures such as cutting interest rates could
only buy time for governments to take action on structural
economic reform, but “sometimes low rates provide incentives
that time is not used so wisely”, he said.