What is it about?
This paper highlights why timely and prompt monetary policy responses are crucial to averting systemic and potentially devastating bank runs - as well as the impacts of liquidity risks and particularly excessive deleveraging processes.
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Why is it important?
This is important, not only from the perspective of goals relating to financial stability, but also in respect of the mandates of maximum employment and price stability.
Perspectives
This paper highlights the importance of the relevance and reliability of financial indicators - as well as the fact that inaccurate forecasts made by central banks, can still be rectified - to a certain extent - depending on how well a monetary policy stance is implemented in response to addressing flaws in a prior forecast.
Prof Marianne Ojo
Northwestern University
Read the Original
This page is a summary of: The Role of Monetary Policy in Matters Relating to Financial Stability: Monetary Policy Responses Adopted During the Most Recent Financial Crisis, SSRN Electronic Journal, Social Science Electronic Publishing,
DOI: 10.2139/ssrn.1713647.
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