Ousmène Mandeng

2014 London Summit - Have Central Banks Created an Asset Bubble?

Willem Buiter, Ousmène Mandeng, Robert Seminara, Zak Summerscale, Staci Warden, David Zervos, Wilhelm Stelzenmüller

Panelists led by Wilhelm Stelzenmüller argue that asset bubbles stem from private sector responses to forced central bank liquidity due to fiscal paralysis, rather than direct central bank creation. The discussion contrasts risks in leveraged private equity and covenant-lite loans with the broader credit market, while identifying ineffective post-2008 monetary frameworks and Eurozone structural deficits as key drivers of stagnation. Experts conclude that sustainable recovery requires comprehensive fiscal stimulus and structural reforms, warning that reliance on monetary expansion alone will eventually force a burst of the current credit bubble.