Markets signal central banks' easy monetary policies are losing potency

Tokyo

CENTRAL banks are running into diminishing returns from their use of easy monetary policies, seven years after first championing quantitative easing to save the world from depression.

The new reality is clear across global financial markets: The Standard & Poor's 500 Index fell on Monday to a 22-month low as bank shares dropped to their weakest since 2013. Japan's benchmark equity index careened on Tuesday towards levels unseen since 2014 and the yield on the country's 10-year bonds dipped below zero for the first time. Stocks are also falling in Europe, where memories of the region's debt crisis are being stirred by rising bond yields in Portugal and a slide in Greek banks.