The Fed Has Got It Wrong
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)
One of the important themes for the world economy discussed at the 2008 World Economic Forum in Davos, Switzerland, revolved around the fact that central banks have lost control of the economy by allowing commercial banks, investment banks and other financial institutions to do as they please. This attitude, which has been wrongly called neo-liberalism, has considerably diminished the central banks’ clout and therefore their effectiveness as:
Guardians of economic stability,
Promoters of orderly economic growth through regulation of money supply, and
Safeguards of value both of the money and of other assets.1
KeywordsInterest Rate Central Bank Hedge Fund Credit Default Swap Investment Bank
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© Dimitris N. Chorafas 2009