LONDON, March 3 (Reuters) - Central banks must look more
closely at their tools for curbing instability in financial
markets after the global bond market turmoil at the start of the
COVID-19 pandemic and a repeat in Britain last year, a senior
Bank of England official said.
Andrew Hauser, BoE executive director for markets, said
regulators needed a better understanding of how much market
dysfunction was acceptable, how much market participants should
be expected to insure themselves against risks and when the
public sector should serve as a backstop.
"We need to work towards a more developed understanding of
the tools that central banks need to deal with this new era of
liquidity risk, and in particular the right mix between lending
and asset buy/sell facilities required in different scenarios,"
he added in the text of a speech he was due to make on Friday.
(Reporting by David Milliken
Editing by William Schomberg)
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