Interesting note on VOX Axel Leijonhufvud.
Brief summary (not literally) for lazy and Anglophobe: any financial crisis involves a collective error in the perception of wealth. The subsequent adjustment requires the distribution of the losses generated by these errors between the different actors in the economy. In the context of a market crisis or allow the judges assigned to these losses lead to a resurgence of it. In response, the State should undertake the dual task of punishing those who took undue risks but also to avoid a widespread collapse of the payments system.
In this regard, noting that the loss allocation mechanism which implicitly applies the U.S. government is unfair and not transparent. According to the author, the Reserve Federal offers liquidity at rates close to zero to private banks that can be channeled to the purchase of Treasury Bonds with a nominal yield of 3 to 4 percentage points. Banks, meanwhile, strengthen their balance sheets to pay the difference in performance at the expense of American taxpayers that this mechanism is slowly paying spurious losses of financial institutions. Finally, warning about the dangers of this procedure if not so distant future Federal Reserve is forced to raise rates to stop inflation pressures (which would increase the funding cost of banks would be barefoot with respect to government bonds).
So much for the note of AL.
Two comments in the margin, if the Fed funds to banks and these provide funds to the Treasury, is there not a mechanism underlying deficit financing by the Federal Reserve?
And a little more superficial: the district, would not you say this bike?
Brief summary (not literally) for lazy and Anglophobe: any financial crisis involves a collective error in the perception of wealth. The subsequent adjustment requires the distribution of the losses generated by these errors between the different actors in the economy. In the context of a market crisis or allow the judges assigned to these losses lead to a resurgence of it. In response, the State should undertake the dual task of punishing those who took undue risks but also to avoid a widespread collapse of the payments system.
In this regard, noting that the loss allocation mechanism which implicitly applies the U.S. government is unfair and not transparent. According to the author, the Reserve Federal offers liquidity at rates close to zero to private banks that can be channeled to the purchase of Treasury Bonds with a nominal yield of 3 to 4 percentage points. Banks, meanwhile, strengthen their balance sheets to pay the difference in performance at the expense of American taxpayers that this mechanism is slowly paying spurious losses of financial institutions. Finally, warning about the dangers of this procedure if not so distant future Federal Reserve is forced to raise rates to stop inflation pressures (which would increase the funding cost of banks would be barefoot with respect to government bonds).
So much for the note of AL.
Two comments in the margin, if the Fed funds to banks and these provide funds to the Treasury, is there not a mechanism underlying deficit financing by the Federal Reserve?
And a little more superficial: the district, would not you say this bike?
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