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After the Apocalypse
Harrington, Peter
Harrington, Peter
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Apocalypse_-__web_2.pdf
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Abstract
The most common cause of bad public policy is disaster. It is usually in response to a scandal or a mishap or an unforeseen event that policy makers do their worst work. This volume is, in part, an attempt to supply a thoughtful response to the financial crisis, quickly, in order to avoid ill-considered policy. There has been a severe financial crisis which several renowned institutions have not survived and during which the credit markets more or less closed down. Inter-bank rates and credit default spreads rose to record levels. Central banks pumped liquidity into the markets, to little avail. Governments stepped in, to recapitalise the banks and, in some cases, to take an equity position. Even if outright nationalisation was avoided in most cases, governments guaranteed bank assets with public money on a vast scale. The financial crisis accelerated the decline in the housing market and added to the gloomy environment which is so depressingly conducive to recession. Central banks have cut interest rates rapidly, thereby signalling their belief that the threats to growth are more severe than risks of higher inflation, which have been evident for some time in energy prices and in commodities markets. It has seemed at times as though the very future of the banking system was in question. Indeed, there is no consensus that, at the time of writing, the financial part of the crisis is yet complete. This volume, however, is predicated on the assumption that the system will not fold, that banking will go on, albeit with fewer, more cautious, institutions and that a policy response will, in due course, be necessary.
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2008-11-06
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9781906693114
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Creative Commons Copyright (CC 2.5)