The Fed Has Got It Wrong

  • Dimitris N. Chorafas
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


Interest Rate Central Bank Hedge Fund Credit Default Swap Investment Bank 
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  1. 7.
    Merrill Lynch, Investment Strategy Update, 22 January 2008.Google Scholar
  2. 8.
    D.N. Chorafas, Economic Capital Allocation with Basle II: Cost and Benefit Analysis. Butterworth-Heinemann. London and Boston, 2004.Google Scholar
  3. 9.
    European Central Bank, Financial Stability Review, December 2007.Google Scholar

Copyright information

© Dimitris N. Chorafas 2009

Authors and Affiliations

  • Dimitris N. Chorafas
    • 1
  1. 1.New York Academy of SciencesUSA

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