American - Public | December 13, 1953 -
Among other objectives, liquidity guidelines must take into account the risks that inadequate liquidity planning by major financial firms pose for the broader financial system, and they must ensure that these firms do not become excessively reliant on liquidity support from the central bank.
Ben Bernanke
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Textbooks describe economics as the study of the allocation of scarce resources. That definition may be the 'what,' but it certainly is not the 'why.'
EconomicsWhyStudyResourcesMay
The Depression was an incredibly dramatic episode - an era of stock-market crashes, breadlines, bank runs and wild currency speculation, with the storm clouds of war gathering ominously in the background... For my money, few periods are so replete with human interest.
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The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis.
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History proves... that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.
HistorySmartFinancialStock Market
The financial crisis that began in the summer of 2007 was an extraordinarily complex event with multiple causes.
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The biggest downside of my current job is that I have to wear a suit to work. Wearing uncomfortable clothes on purpose is an example of what former Princeton hockey player and Nobel Prize winner Michael Spence taught economists to call 'signaling.'
WorkJobPurposeHockeyWinnerSuit
I got into economics because I wanted to make things better for the average person.
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Deflation can be particularly dangerous when a financial system is shaky, with household and corporate balance sheets in poor shape and banks undercapitalized and heavily burdened with bad loans.
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Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates.
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You want to put the fire out first and then worry about the fire code.
FireWorryYouWantFirstOut
The benefit of appointing a hawkish central banker is the increased inflation-fighting credibility that such an appointment brings.
CredibilityAppointmentBenefit
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