Via Reuters comes this on former Bank of Japan (BOJ) Deputy Governor Hiroshi Nakaso.
- Says central banks must remove emergency support measures once financial crises are over to avoid causing moral hazard in the market
- "This moral hazard must be removed once the crisis is over, though this is easier said than done because it's a contradictory issue," Nakaso said in a seminar hosted by the University of Tokyo and International Monetary Fund on Thursday
- "Crisis management is like creating ... artificial moral hazard," he said. It shouldn't stay forever."
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Adds Reuters:
- Nakaso and incumbent BOJ deputy governor Masayoshi Amamiya are considered among top candidates to succeed BOJ Governor Haruhiko Kuroda, whose current term ends in April next year.
- Neither of them would rush into tightening monetary policy given Japan's fragile economy and the need to keep low the cost of funding its huge public debt, analysts say. However, compared with Amamiya, Nakaso is seen more in favour of dialing back Kuroda's radical stimulus. In a book published earlier this year, he laid out in detail how the BOJ could end ultra-loose policy.
