MADRID, June 17 Global accommodative monetary policy and investors' push for returns have become risky as asset valuations soar to record highs, Bank of Spain Governor Luis Linde said in a speech to the lower house of Parliament on Tuesday.
"Some valuations are at record highs in a context of a search for returns by investors, which is playing a predominant role over other considerations based in the fundamental value of the assets," Linde said.
"This international monetary and financial market situation has risks, in that it is susceptible to sharp changes due to expectations of the removal of monetary stimulus."
On Spain's tax reform, Linde said proposals must improve efficiency without putting at risk the government's measures to balance the state's budget in the midst of an economic recovery.
"Pending fiscal consolidation efforts are still significant...the culmination of the fiscal consolidation process must continue to be a priority for Spain's economic policy," Linde said. (Reporting By Paul Day, Editing by Sonya Dowsett)