Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.
I believe that the efficacy of the cuts that we have undertaken has been diminished by virtue of the liquidity–solvency crisis.
crisis. Let me turn to Pat Parkinson to introduce the presentation.
You have to have a deep recession and a financial crisis. That’s pretty unusual. Twice a century, or once a century so far.
some of these recipients of the swap lines get into a liquidity crisis. Is the European Central Bank
complicated as I possibly could have imagined. The reality is that we are in the worst financial crisis
financial crisis similar to what occurred in Asia in the late ’90s.
than the market during normal times but lower than the market during times of crisis, which we would
relative to pre-crisis levels.” Those were fantastically low spreads that were out of touch with reality
this was a factor in the recent crisis, we might want to point that out to them as part of our
debt crisis of some kind coming. It is not covered in these charts, but do you have a sense of
crisis, and no doubt in part in response to what has been happening in the United States
difficult to argue against dodging a crisis. It is a very daunting thought to think about a crisis
crisis, I admit, and I just want to make sure that we are clear on what it is we are initiating here.
crisis that will be addressed in the fullness of time, and this is one lesson that we are going to have
intensification of the financial crisis has augmented the downside risks to growth and thus has
funding problem at year-end. Now, this preceded the recent crisis, so even before this last week they
important thing here—and what we’re going for—is credibility. In a crisis you need enough force—more force
. Therefore, we have a greater likelihood of a crisis later as we try to maintain our own domestic
issue. It is not going to produce a crisis tomorrow. It might not ever produce a crisis. But
statement by central banks:
“Throughout the current financial crisis, central banks have engaged in
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