Debt, global liquidity and the challenges of exit

English translation of speech in Spanish by Jaime Caruana, General Manager of the Bank for International Settlements, given at the 8th FLAR-CAF International Conference on "External liquidity, economic policy and macroeconomic stability in the emerging and developing world", Cartagena, Colombia, 8 July 2013.

Recent volatility in financial markets suggests that, notwithstanding the many efforts of the authorities to support growth in the past six years, full normality is not yet at hand and that fragilities persist in the global economy and financial system. This speech, delivered at the 8th FLAR-CAF International Conference on "External liquidity, economic policy and macroeconomic stability in the emerging and developing world", reflects on the sources and implications of these fragilities. It examines in particular the rising indebtedness and the rapid credit growth observed in parts of the world in recent years. It also discusses the role that monetary accommodation may have played in this context and the challenges it may pose.