{"id":30461,"date":"2012-06-25T11:52:00","date_gmt":"2012-06-25T15:52:00","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/06\/too-much-finance-can-suffocate-a-country-bis-economist\/"},"modified":"2012-06-25T11:52:00","modified_gmt":"2012-06-25T15:52:00","slug":"too-much-finance-can-suffocate-a-country-bis-economist","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/06\/25\/too-much-finance-can-suffocate-a-country-bis-economist\/","title":{"rendered":"Too much finance can suffocate a country – BIS economist"},"content":{"rendered":"

By Central Bank News
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   <\/span> <\/span>Like cancer, a nation\u2019s financial sector can grow so large that it starts to devour its host, according to the chief economist of the respected Bank for International Settlements (BIS).<\/span><\/div>\n
    <\/span>\u201cBeyond a certain point, financial development is bad for an economy. Instead of supplying the oxygen that the real economy needs for healthy growth, it sucks the air out of the system and starts to slowly suffocate it,\u201d said Stephen Cecchetti, chief economic adviser to the BIS, known as the central bankers\u2019 bank.<\/o:p><\/span><\/div>\n
    <\/span>\u201cHouseholds and firms end up with too much debt. And valuable resources are wasted.\u201d<\/o:p><\/span><\/div>\n
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    In his remarks, which were made to a BIS conference in Switzerland last week, Cecchetti not only questioned the benefit to societies from a large financial sector, but he also questioned financial globalization: the trend of some countries to rely on other countries for financial services.<\/o:p><\/span><\/div>\n
    <\/span>Cecchetti\u2019s speech to central bankers at the conference would seem to fly in the face of the widely-accepted beliefs among economists that globalization always benefits societies and a growing financial sector is a sign of progress.<\/o:p><\/span><\/div>\n
    <\/span>\u201cMany of us have started to ask if finance has a dark side,\u201d he said, pointing to the ongoing detrimental effects on economies from the global financial crises.<\/span><\/div>\n
    <\/span>Evidence suggests, Cecchetti said, that a growing share of the financial system actually slows overall economic growth and countries can become vulnerable by either specializing excessively on finance or relying too much on other countries to provide such services.<\/o:p><\/span><\/div>\n
    <\/span>\u201cHas financial globalisation gone too far in some countries?\u201d Cecchetti asked.<\/o:p><\/span><\/div>\n
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    Click<\/a> to read “Is Globalisation Great?” by Stephen Cecchetti<\/div>\n

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    www.CentralBankNews.info
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By Central Bank News     Like cancer, a nation\u2019s financial sector can grow so large that it starts to devour its host, according to the chief economist of the respected Bank for International Settlements (BIS).     \u201cBeyond a certain point, financial development is bad for an economy. Instead of supplying the oxygen that the real … <\/p>\n

Continue reading “Too much finance can suffocate a country – BIS economist”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-30461","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/30461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=30461"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/30461\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=30461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=30461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=30461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}