Report: Central banks holding 30% of global GDP

25 June 2012

Central banks are currently in possession of around 30 per cent worth of global gross domestic product (GDP) following their extensive purchasing of government bonds.

The Bank for International Settlements' (BIS) latest annual report published yesterday (24 June) revealed that such institutions now hold some $18 trillion worth of cash due to their asset-buying programmes used to ease the impact of the worldwide downturn.

This figure is approximately double what the banks maintained a decade ago and is indicative of the level of difficulty economies in all areas of the world have faced in recent times.

Indeed, the BIS noted there has been an "extraordinary persistence" of loose fiscal policy in the majority of nations globally, primarily because of the "insufficient" action being taken by governments to address deep-seated structural issues.

"The goals of balanced growth, balanced economic policies and a safe financial system still elude us," the group added.

By Asim Shah

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