World is not running out of safe assets – BIS’s McCauley
Supply of safe assets can comfortably meet demand at present, BIS economist says
The world’s supply of safe assets is keeping up with demand, the Bank for International Settlements’ Robert McCauley says in a new paper, challenging conventional narratives of the US’s role as global liquidity supplier.
A widely-accepted narrative, as McCauley notes in the working paper, is that the US economy is shrinking as a percentage of global output, while emerging markets grow faster and demand ever more dollar-denominated assets for their reserves. To meet such demand, the US debt-to
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