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The global financial crisis demonstrated that monetary policy alone cannot ensure both price and financial stability. According to the Tinbergen (1952) rule, there was a…
The global financial crisis demonstrated that monetary policy alone cannot ensure both price and financial stability. According to the Tinbergen (1952) rule, there was a gap in the policymakers’ toolkit for safeguarding financial stability, as the number of available policy instruments was insufficient relative to the number of policy objectives. That gap is now being closed through the creation of new macroprudential policy instruments. Both monetary policy and macroprudential policy have the capacity to influence both price and financial stability objectives. This paper develops a framework for determining how best to assign instruments to objectives.
Using a simplified New-Keynesian model, the authors examine two sets of policy trade-offs, the first concerning the relative effectiveness of monetary and macroprudential policy instruments in achieving price and financial stability objectives and the second concerning trade-offs between macroprudential policy instruments themselves.
This model shows that regardless of whether the objective is to enhance financial system resilience or to moderate the financial cycle, macroprudential policies are more effective than monetary policy. Likewise, monetary policy is more effective than macroprudential policy in achieving price stability. According to the Mundell (1962) principle of effective market classification, this implies that macroprudential policy instruments should be paired with financial stability objectives, and monetary policy instruments should be paired with the price stability objective. The authors also find a trade-off between the two sets of macroprudential policy instruments, which indicates that failure to moderate the financial cycle would require greater financial system resilience.
The main contribution of the paper is to establish – with the help of a model framework – the relative effectiveness of monetary and macroprudential policies in achieving price and financial stability objectives. By so doing, it provides a rationale for macroprudential policy and it shows how macroprudential policy can unburden monetary policy in leaning against the wind of financial imbalances.
As a result of the changes caused by the preparation of foods gradually passing out of the home into the hands of manufacturers, there has arisen an absolute need for a complete supervision of the public food supplies. A supervision which shall place some limit upon the substitution of cheaper and inferior methods and dangerous materials in place of the standard formerly used in our homes.
I HAVE learned, with considerable relief, that the Library Association is taking no notice whatever of the peculiar suggestion in NLW's editorial last month that they rush not to appoint a new Secretary to succeed Mr Hilliard in September.
The information which has hitherto appeared in the daily press as to the evidence laid before the Departmental Committee which is inquiring into the use of preservatives and colouring matters can hardly have afforded pleasant reading to the apologists for the drugging of foods. It is plainly the intention of the Committee to make a thorough investigation of the whole subject, and the main conclusions which, in the result, must bo forced upon unbiassed persons by an investigation of this character will be tolerably obvious to those who have given serious attention to the subject. At a later stage of the inquiry we shall publish a full account of the evidence submitted and of the Committee's proceedings. At present we may observe that the facts which have been brought forward fully confirm the statements made from time to time upon these matters in the BRITISH FOOD JOURNAL, and amply justify the attitude which we have adopted on the whole question. Representatives of various trade interests have given evidence which has served to show the extent to which the practices now being inquired into are followed. Strong medical evidence, as to the dangers which must attach to the promiscuous and unacknowledged drugging of the public by more or less ignorant persons, has been given; and some medical evidence of that apologetic order to which the public have of late become accustomed, and which we, at any rate, regard as particularly feeble, has also been put forward. Much more will no doubt be said, but those who have borne the heat and burden of the day in forcing these matters upon the attention of the Legislature and of the public can view with satisfaction the result already attained. Full and free investigation must produce its educational effect ; and whatever legal machinery may be devised to put some kind of check upon these most dangerous forms of adulteration, the demand of the public will be for undrugged food, and for a guarantee of sufficient authority to ensure that the demand is met.
It is well known that it is difficult to dislodge incumbents if new entrants provide identical services via identical channels. Hence, it was expected that, especially in…
It is well known that it is difficult to dislodge incumbents if new entrants provide identical services via identical channels. Hence, it was expected that, especially in a broadband world, the main competition for fixed‐wire networks would come from cable operators. The UK was one of the first countries in Europe to develop cable as a practical alternative to fixed‐wire telephony, but in the event not only was the initial structure of the industry seriously flawed but the cost of creating cable networks proved to be a recipe for bankruptcy. However, once restructured post‐bankruptcy, the remaining two cable operators may finally fulfil their destiny.
THE monumental History of Criticism by Professor Saintsbury, and Mr. Hall Caine's lighter series of studies would be sufficient to put anyone on their guard against accepting as final many of the critical decisions of the important literary reviews. Mr. Caine's book particularly is a revelation of error and spite such as makes one wonder that anonymous literary criticism should be received with toleration by bookmen.
Introduction Hastily, I beat the editor to it by writing “These are the personal views of the author, and do not necessarily represent the views of the editor of this journal.” Indeed, I take it further. The article does not necessarily, in general manner or particular phrase, represent the views of the National Committee of National Library Week. It's a great disappointment to me that to date neither the National Committee nor myself has had to disown the other. Our opinions, to date, coincide on all salient points. No blows have been exchanged between Committee and Organiser. Since concord should often be more rightly spelt “c‐o‐m‐p‐l‐a‐c‐e‐n‐c‐y”, I regret this. All, however, may yet be well. My full views as Organiser of NLW 1969 follow: I shall state them with the most forthright candour and the most furious conviction; and the fisticuffs may well follow, as sure as Library fines. If the editor considers this preamble, too … well, too ambling … I proffer one excuse. As organiser, I'm as over‐worked and time‐pressed as any librarian, and my defence is therefore borrowed from Flaubert: “Forgive a long letter—I had no time to write a short one.” (Reference librarians, please check this quotation. I'm too busy.) Finally, there are those who write very lightly when they wish to state their most serious belief. Into this maladjusted and misjudged fraternity, I was myself born.
In recent years Lehman Brothers, one of the five largest investment banks in the United States, had grown increasingly reliant on its fixed income trading and underwriting…
In recent years Lehman Brothers, one of the five largest investment banks in the United States, had grown increasingly reliant on its fixed income trading and underwriting division, which served as the primary engine for its strong profit growth. The bank had also significantly increased its leverage over the same timeframe, going from a debt-to-equity ratio of 23.7x in 2003 to 35.2x in 2007. As leverage increased, the ongoing erosion of the mortgage-backed industry began to impact Lehman significantly and its stock price plummeted. Unfortunately, public outcry over taxpayer assumption of $29 billion in potential Bear losses made repeating such a move politically untenable. The surreal scene of potential buyers traipsing into an investment bank's headquarters over the weekend to consider various merger or spin-out scenarios repeated itself once again. This time, the Fed refused to back the failing bank's liabilities, attempting instead to play last-minute suitors Bank of America, HSBC, Nomura Securities, and Barclay's off each other, jawboning them by arguing that failing to step up to save Lehman would cause devastating counterparty runs on their own capital positions. The Fed's desperate attempts to arrange its second rescue of a major U.S. investment bank in six months failed when it refused to backstop losses from Lehman's toxic mortgage holdings. Complicating matters was Lehman's reliance on short-term repo loans to finance its balance sheet. Unfortunately, such loans required constant renewal by counterparties, who had grown increasingly nervous that Lehman would lose the ability to make good on its trades. With this sentiment swirling around Wall Street, Lehman was forced to announce the largest Chapter 11 filing in U.S. history, listing assets of $639 billion and liabilities of $768 billion. The second domino had fallen. It would not be the last.
This case covers the period from the sale of Bear Stearns to JP Morgan to the conversion into bank holding companies by Goldman Sachs and Morgan Stanley, including the Lehman Brothers bankruptcy and the sale of Merrill Lynch to Bank of America. The case explains the new global paradigm for the investment banking industry, including increased regulation, fewer competitors, lower leverage, reduced proprietary trading, and-potentially-reduced profits.
SEPTEMBER, by a traditional impulse, has always represented to some minds the beginning of the most active period in the library year. This year the month that sees the close of the holiday season, the shortening day and lengthening evening, holds fairer promises and greater difficulties than any in the past six years or perhaps in the past twenty‐five. It sees large programmes in prospect but many fences to be surmounted and, if the physicists are right, the beginning of a new era. It is doubtful if, in so short a space of time as that which has elapsed since we last wrote, so many important events have occurred. The entirely new political alignment may have its effects on our post‐war policy. We hope the library will never again be the protege of a political party because that means that it becomes thereby the target of the opposition—as was the case when in London a change of party in local government brought about the wreck for a generation of at least one library service which had the misfortune to have been initiated by the other party. We have however, no immediate apprehensions about public libraries in present circumstances.