BIS central bankers’ speeches  From a political perspective, this means that we cannot rely on financial markets to fix structural political problems. For example, if it is felt that the income of low income households is growing too slowly, it is not enough to simply rely on credit institutions to finance investments in the hope that this will create jobs.
This is because the financial markets would provide more loans to such households – and if this is not sustainable, it could lead to yet another financial crisis. Thus, politics must enable banks and markets to support the economy, not to fix it. Finally, let’s turn to capital liberalisation in emerging markets.