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By Mort Zuckerman
Published: December 13 2009 19:10 | Last updated: December 13 2009 19:10
It is only a year since our over-leveraged system buckled. Fear and panic paralysed normal market functions. What pulled us back from the chasm was the intervention of the Federal Reserve Bank.
The Fed led the way by cutting interest rates aggressively to close to zero. It realised that unconventional policy tools were necessary to keep equity and debt capital flowing, introducing unique lending and asset purchase programmes. The unprecedented measures restored confidence and liquidity without provoking a sharp rise in inflation. The rescue could not have happened without the Fed's credibility and independence from short-term political pressures.
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