Central banks make economy vulnerable: OECD's White
Central banks' ultra-loose monetary policy is putting the world economy at risk, said William White, a senior adviser to the Organization for Economic Cooperation and Development.
Negative interest rates and quantitative-easing programs from the US to Japan may have unintended side effects such as higher debt levels for both sovereigns and consumers, said White, who leads the OECD's Economic and Development Review Committee. Central bankers have been dragged away from their focus on inflation as governments struggle to generate sustainable growth, he added.
"The objective of that policy has changed totally -- it's trying to stimulate aggregate demand and the honest truth is that it's not capable of doing that in a sustainable way," White said in an interview on Tuesday. "If people thought we were in a period of deleveraging that would set the scene for a period of robust growth. We haven't even started yet."