UBS: Central Bank policy divergence the major theme for 2015

UBS: Central Bank policy divergence the major theme for 2015. Andreas Koester of UBS Global Asset Management says the divergent movements of Central Bank policy settings will be the major theme of 2015. He says any move away from ZIRP is likely to have material disruptive impacts. 'As soon as the alternative becomes attractive, all of this money will come back to the risk-free rate, there will be a stampede and there will be losses. Central bank policy is important for this to happen, so it might go on for another two years. But we all know the end point - a stampede out of those assets back to the risk free rate. It will be brutal because there is no warehousing of risk... Central banks tend to go in cohorts, they don't like to be too far out. But every central bank you talk to is feeling unease with these unorthodox policies. They would all like to go back to what they learnt at university, not doing QE. Read the full article (paywall): (VIEW LINK)