G-20 wants central banks to do more
Finance leaders of the world’s top economies urged their governments to do more in order to enhance global growth amid rising concerns over the actual potency of today’s monetary policy.
It’s clear this uncertainty might disappoint many investors hoping for a good stimulus plan. Meanwhile, representatives of the G-20 told that they would utilize fiscal policy flexibly in order to boost job creation, growth and confidence. Central bank governors and finance ministers of the G-20 agreed that just one monetary policy isn’t enough to ensure balanced growth. Furthermore, the G-20 members decided to consult closely on currencies.
In general, the G-20 members think central banks proved inefficient in avoiding another global downtime. Though in recent years these major financial institutions did their best to stabilize the world economy, their traditional tools keep rapidly losing their effectiveness. Most of the G-20 members are assured that only more aggressive fiscal policy as well as structural reforms can ensure growth.
Unfortunately, the effects of monetary policies, including even innovative ones are no longer effective. To add to this, some financial leaders, including the governor of the Bank of England, Mark Carney doubt that negative interest rates could boost domestic demand.