Why Central Bankers Missed the Crisis
The lesson of 2008, a top economist says, is that monetary maestros don’t pay enough attention to financial markets. Are they making the same mistake again?
Basel, Switzerland
It’s been a rough decade for most developed economies, as businesses, politicians, policy makers and voters have struggled with the aftermath of a global financial panic and deep recession. So it’s a good time to ask what we’ve learned—especially about the causes and cures of the financial instability that caused so many problems. Claudio Borio’s answer is sobering: We know less than we think we do, and our ignorance could cost us.
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