Head of World's Oldest Central Bank Says Low Rates Pose Financial Stability Risk

The video discusses the increased risks in the financial system due to macroeconomic conditions and low interest rates. It explores the role of monetary policy in contributing to stability risks and the importance of macroprudential policies. The video also highlights liquidity risks in the banking sector, the impact of money laundering allegations on financial stability, and the need for international cooperation to address climate change risks.

What is one of the main reasons for the increased risks in the global economy?

• Rising unemployment

• Increased government spending

• Prolonged low interest rates

• High inflation rates

How can monetary policy contribute to stability risks?

• By increasing interest rates rapidly

• By increasing inflation

• By keeping interest rates low for a long time

• By reducing government debt

What is the focus of the stress testing mentioned in the second section?

• Market risk

• Credit risk

• Liquidity issues

• Solvency issues

What is the potential impact of money laundering allegations on financial stability?

• Increased interest rates

• Improved bank reputation

• Harm to banks and public perception

• Decreased inflation

Why is climate change considered a risk for the financial system?

• It leads to higher interest rates

• It requires international cooperation to address

• It reduces government spending

• It increases unemployment