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Monetary and fiscal policy-mix addressing the disease of inflation

· François Villeroy de Galhau, Governor of the Banque de France (France)

Summary written by Dark Majestic in its own words · topics: monetary policy and interest rates, inflation and price stability, banking regulation and supervision, public finances and debt

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· François Villeroy de Galhau Wiki · Banque de France WikiMonetary and fiscal policy-mix addressing the disease of inflation

ContextSpeech at the Eurofi Financial Forum 2023 in Santiago de Compostela; the Banque de France keeps prices stable and calls for fiscal policy that helps fight inflation.

Why it mattersVilleroy describes inflation as a disease that needs both tight money and fiscal discipline.

Problems raised
  1. Inflation is a disease that must be cured.
  2. Fiscal and monetary policy must not work against each other.
  3. Basel 3 implementation is uneven.
Solutions proposed
  1. Combine monetary tightening with fiscal discipline.
  2. Implement Basel 3 fully and consistently.
  3. Keep rates at a plateau long enough.
Read full speech on bis.org ↗

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