Central banks need tools to halt bubbles

Gulf central banks should be given greater powers to help avert another asset bubble, says a senior official of the IMF.

The regulators need extra monetary policy tools to allow them greater control within markets, Dr Masood Ahmed, the director of the IMF’s Middle East and Central Asia Department, said yesterday.

“Central banks need to think not just about price stability but financial stability, that means looking at asset markets,” Dr Ahmed said. “That’s easier said than done as the tools for doing this are complicated, but that’s one of the tasks they need to look at.”