Central banks have less ammunition to fight deep downturn, warns Mark Carney
Industry News | 07/01/20
Mark Carney, governor of the Bank of England, has said that central banks might struggle “if there were to be a deeper downturn”.The outgoing governor told the Financial Times that the global economy is heading towards a “liquidity trap” that would undermine central banks’ efforts to avoid a future recession. A global liquidity trap occurs when central banks lose all effectiveness to manage the economy because demand is weak and looser policy does not encourage any additional spending.
Source: The Telegraph
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