This site is for archive purposes. Please visit for latest updates
Go to Top

Financial Scarcity Amid Plenty

Eichengreen, Barry, (2016), “Financial Scarcity Amid Plenty”, Project Syndicate, 14 June

With interest rates at all-time lows and central banks buying everything that moves, the world is awash with credit. Yet, paradoxically, a dangerous shortage of international liquidity is putting the global economy at risk. “International liquidity” refers to high-quality assets accepted around the world for paying import bills and servicing foreign debts. These are the same assets that central banks use when intervening in foreign-exchange markets. They serve as reliable stores of value for international investors. They provide pricing benchmarks in financial markets. And they are widely accepted as collateral for cross-border loans.

Relevant Posts