Evans Says Fed Shouldn’t Adopt Policy to Prick Asset ‘Bubbles’ |
Bloomberg - Nov 13, 2009 |
The Federal Reserve should strengthen regulation to safeguard financial stability rather than adopt a policy to prick asset-price bubbles that may cause market turmoil, Chicago Fed President Charles Evans said.
“As long as we can’t detect bubbles with great confidence, it seems unwise to adopt fighting them as a policy objective,” Evans said today in a speech in Paris. “Instead it seems better to commit to what central banks are already mandated to do: preserve the safety and soundness of the financial system at all times.”
Policy makers, while overseeing a record injection of liquidity, are debating how to respond to a future surge in asset prices after a boom in the U.S. real estate market ended in a collapse that helped trigger the worst recession since the 1930s.
Read Full Article from Bloomberg
- Posted: 2009-11-13 11:11:43
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