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Today\u2019s interview is a very special one. Dr. Claudio Borio, renowned economist and Head of the Monetary and Economic Department at the Bank For International Settlements (BIS), joins Joseph Wang of Fedguy.com and Jack Farley for a wide-ranging discussion on the nature of financial instability and the interplay of monetary policy and fiscal policy. Borio shares insight from recent BIS research on inflationary regimes, financial cycles, and the boundaries of debt-fueled growth. Borio notes that the materialization of interest rate risk has so far been seen in the banking sector, but that we have yet to credit risk. Filmed on October 17, 2023.\n\nSome of Borio\u2019s and the BIS\u2019 works mentioned in this interview:\n\n\u201cMonetary and fiscal policy: safeguarding stability and trust,\u201d June 2023 Presentation in Basel, Switzerland, Claudio Borio\nhttps://www.bis.org/speeches/sp230625a_slides.pdf\n\n\u201cThe two-regime view of inflation,\u201d March 2023, Claudio Borio, Marco Lombardi, James Yetman and Egon Zakraj\u0161ek\nhttps://www.bis.org/publ/bppdf/bispap133.pdf\n\n\u201cInternational banking and financial market developments\u201d BIS Quarterly Review, September 2023\nhttps://www.bis.org/publ/qtrpdf/r_qt2309.pdf\n\n\u201cDoes money growth help explain the recent inflation surge?\u201d 26 January 2023, Claudio Borio, Boris Hofmann and Egon Zakraj\u0161ek\nhttps://www.bis.org/publ/bisbull67.pdf\n\n\u201cOn money, debt, trust and central banking,\u201d January 2019, Claudio Borio\nhttps://www.bis.org/publ/work763.pdf\n\n\u201cNavigating by r*: safe or hazardous?\u201d November 2021, Claudio Borio\nhttps://www.bis.org/publ/work982.pdf\n\n\u201cThe financial cycle and macroeconomics: What have we learnt?\u201d December 2012, Claudio Borio\nhttps://www.bis.org/publ/work395.pdf\n__\nFollow Bank For International Settlements on Twitter https://twitter.com/BIS_org\nFollow Joseph Wang on Twitter https://twitter.com/FedGuy12\nFollow Jack Farley on Twitter https://twitter.com/JackFarley96\nFollow Forward Guidance on Twitter https://twitter.com/ForwardGuidance\nFollow Blockworks on Twitter https://twitter.com/Blockworks_\n__\n(00:00) Introduction\n(00:32) The Interplay Between Monetary Policy & Fiscal Policy\n(09:50) High Levels Of Government Indebtedness As A Risk\n(12:35) Just How Interest Rate Sensitive Is The Global Economy?\n(15:56) The Financial Cycle\n(24:12) The Two Inflationary Regimes\n(36:45) Central Bank Balance Sheet Policy (Quantitative Easing & Quantitative Tightening)\n(39:34) Liquidity In Sovereign Bond Markets\n(46:13) Non-Bank Financial Sector Is "Rife With Hidden Leverage & Maturity Mismatches"\n(50:56) Interest Rate Risk Within Banking System\n(56:45) Concluding Thoughts On Debt & Inflation\n__\nDisclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.