Uncertainty in unwinding of unconventional monetary policy

Abstract

What is happening here The global markets seem to be losing the anchor. There is neither foothold nor firmness in the ground. And even the ground seems shifting. Just as the recent Himalayan tsunami in North India, a global financial tsunami seems to be on the way. Were global financial environment norms ignored and flouted in recent years Embedded in Ben Bernankes remark of June 19, 2013, are sufficient hints of the impending unwinding process of the unconventional monetary policy. Hardly five days earlier IMF had advised the Fed to continue to prepare for the smooth exit. Madame Lagarde on June 14 had acknowledged that unwinding is likely to present challenges, including for financial stability. In April, IMF had already warned that the exit would be challenging with many unknowns. Shigenori (2010), in an interesting paper on the subject, based on Japanese experience, observes that the exit is not expected to be smooth. The untested exit strategy being discussed by the US Congressional Research Service (February 2013) has also acknowledged the associated risks. Read more at: https://www.financialexpress.com/archive/uncertainty-in-unwinding-of-unconventional-monetary-policy/1132843/