Comments on: Paul De Grauwe: "Central banks should prick asset bubbles"

By: "Cassandra"

"Cassandra" — Fri, 02 Nov 2007 14:05:00 +0000

We might clarify things by semantically reserving the title “The Central Bank” for independent institutions specifically charged with the singular mission of maintaining price stability (and other technical details of systemic plumbing operations). The US Federal Reserve, by contrast, would hereafter be referred to “The Government Bank For Perpetual (Nominal) Economic Growth & Investor Loss Prevention” (and, where, applicable, paying lip-service to not letting inflation get too too TOO outta control). This would go a long way towards avoiding any future confusion.

By: Anonymous

Anonymous — Fri, 02 Nov 2007 11:25:00 +0000

finally some rationality on the role of central banks. since the object of a central bank is to ensure financial and price stability, to argue that supervision of credit creating enterprises does not fall within their scope is rubbish.

By: Anonymous

Anonymous — Fri, 02 Nov 2007 08:24:00 +0000

Old debate the central banks are making bubbles and repudiate their putative children, no mandate, no discrimination between good growth and unbalanced growth, no control on the unbridled misuse of the central banks money by the financial institutions and even no stringent banks supervision.
They will have to face the real problems soon as banks will continue to merge, their sizes will outgrow the risk tolerance of the financial system through larger concentration of risks.
Several examples are available for their perusal the introduction of a flawed accounting system of level 1/ 2 /3 where assets have no identifiable prices and assets liabilities are in no man’s accounting land.