BIS central bankers’ speeches  1  One particular problem with sovereign bond purchases in a monetary union is that they redistribute risks among the taxpayers of different countries. Any such decisions, however, should be taken by democratically elected governments and parliaments. The rallying markets are also being sustained by exceptionally easy monetary policy conditions the world over.
Nevertheless, there is a risk that market valuations may be running ahead of the adjustment processes. The current long-term yields on some European government bonds already appear to have factored in the required adjustment to a large extent. This, however, creates a setback potential. It is therefore all the more important that policymakers ensure that the necessary economic progress is actually achieved.