The Bank for International Settlements (BIS) is calling on governments to take control of the rapid growth of public debt, which is becoming less stable amid rising interest rates. BIS CEO Agustin Carstens said at a Bank of Japan conference on May 27 that the era of low interest rates was over, and many countries' current budget plans needed to be reviewed. Carstens noted that after the global financial crisis, low interest rates made it possible to avoid difficult decisions such as spending cuts or tax increases. However, in the new circumstances, Governments urgently need to reform economic policies to prevent the erosion of public trust. He also warned about the risks of a sudden destabilization of financial markets due to accumulated imbalances. Rising bond yields in the United States, Europe, and Japan underscore market concerns about increased debt-financed spending. Carstens stressed that fiscal consolidation must begin immediately, otherwise countries will face serious financial difficulties.
