tommy271
Forumer storico
Dutch cbank: Weak euro zone states vulnerable to rate shock
Wed Apr 27, 2011 7:11am EDT
(Repeats to additional subscribers)
AMSTERDAM, April 27 (Reuters) - Greece, Ireland and Portugal have become more vulnerable to negative interest rate shocks, the Dutch central bank warned on Wednesday.
"A sudden interest rate increase in the capital markets, for example, will harm the economy and government finances in these countries and therefore also the efforts to solve the debt crisis," DNB said.
"Just as in the run-up to the financial crisis, globally there is an oversupply of liquidity in the global financial system. Monetary policy is too loose for the world as a whole," DNB said.
The Dutch central bank is led by Nout Wellink, who is a European Central Bank (ECB) governing council member and who is also chairman of the Basel Committee on Banking Supervision, which set up new bank capital and liquidity rules known as Basel III.
The DNB said that the risk of interest rate shocks has increased because of greater inflation pressure and rising commodity prices.
"Emerging markets in particular are growing strongly. This comes with rises in commodity prices and increasing inflation pressure globally. The risk of interest rate shocks has therefore become more prominent," the Dutch central bank said in its semi-annual financial stability report.
"In the medium term these developments could threaten the financial stability if new bubbles in financial markets or unsustainable debt positions arise," DNB said.
The central bank also warned that Japan's debt ratio of more than 200 percent of gross domestic product (GDP) and the United States' 2010 budget deficit of 10 percent of GDP are also a concern, in addition to the euro zone debt crisis.
"The risk is that the debt position of these countries could prove to be unsustainable in the future if reform efforts fail and these countries lose investors' confidence," DNB said.
Wed Apr 27, 2011 7:11am EDT
(Repeats to additional subscribers)
AMSTERDAM, April 27 (Reuters) - Greece, Ireland and Portugal have become more vulnerable to negative interest rate shocks, the Dutch central bank warned on Wednesday.
"A sudden interest rate increase in the capital markets, for example, will harm the economy and government finances in these countries and therefore also the efforts to solve the debt crisis," DNB said.
"Just as in the run-up to the financial crisis, globally there is an oversupply of liquidity in the global financial system. Monetary policy is too loose for the world as a whole," DNB said.
The Dutch central bank is led by Nout Wellink, who is a European Central Bank (ECB) governing council member and who is also chairman of the Basel Committee on Banking Supervision, which set up new bank capital and liquidity rules known as Basel III.
The DNB said that the risk of interest rate shocks has increased because of greater inflation pressure and rising commodity prices.
"Emerging markets in particular are growing strongly. This comes with rises in commodity prices and increasing inflation pressure globally. The risk of interest rate shocks has therefore become more prominent," the Dutch central bank said in its semi-annual financial stability report.
"In the medium term these developments could threaten the financial stability if new bubbles in financial markets or unsustainable debt positions arise," DNB said.
The central bank also warned that Japan's debt ratio of more than 200 percent of gross domestic product (GDP) and the United States' 2010 budget deficit of 10 percent of GDP are also a concern, in addition to the euro zone debt crisis.
"The risk is that the debt position of these countries could prove to be unsustainable in the future if reform efforts fail and these countries lose investors' confidence," DNB said.
