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Private Sector Debt and Financial Stability

This report highlights three interrelated challenges facing policymakers as they seek to manage potential macro-financial risks. The first is assessing the importance of private sector debt vulnerabilities, as complicated by significant uncertainties in the macroeconomic environment. The second challenge is deciding the appropriate policy mix to mitigate emerging or existing private sector debt vulnerabilities. The third and final challenge for policymakers is to guard against misperceptions about the prospects for exceptional policy support that might cause lenders to underprice risks in the future.

Categories: Recommended Readings
Author: BIS