A customer counts his U.S. dollar notes in a bank in Cairo, Egypt March 10, 2016. REUTERS/Amr Abdallah Dalsh
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WASHINGTON / FRANKFURT: Central bankers usually worry about when to remove the punch bowl of cheap finance but when they gather in Washington, D.C. this week they will face a different problem: How to force the world to drink.In the U.S. households are paying down mortgages instead of borrowing against homes to fund consumption, altering behavior that arguably helped fuel the 2007 financial crisis but that also contributed to economic growth. A Chicago Federal Reserve Bank composite index of household, bank and corporate leverage has been below average for nearly four years.European and U.S. companies are socking away cash and the Bank of Japan's descent into negative rates has yet to boost consumption, corporate investment, or even faith in an economic rebound.The Geneva-based Bank for International Settlements, the central banks' central bank, has acknowledged that the array of new capital and leverage requirements imposed on the world's commercial banks in recent years would come at a cost.
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