Tilting has the disadvantage that some participants in the financial markets can act in a way that reduces the efficacy of the monetary policy.

Question

Quizplus · Accepted Answer

When participants in the financial markets tilt their portfolios towards a certain asset or security, it can lead to increased volatility and market distortion, which can make it difficult for the central bank to achieve its monetary policy objectives. This is why tilting can have a negative impact on the efficacy of monetary policy.

Tilting Has the Disadvantage That Some Participants in the Financial