It’s a trend at the moment for central bankers to talk about risks from low yields but no one has stepped up to the plate and called for action.
Bundesbank executive board member Andrea Dombret says calm markets hide risks, in an interview with Bloomberg.
“Real estate markets in some European countries are pretty high, corporate bond valuations seem stretched and high. The low volatility leads to market participants thinking that they don’t need to hedge,” he said.
Dombret will take over banking and supervision and the Bundesbank this month. He says he’s a big believer in risk models and checking them with leverage ratios.
