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Market bailouts and the "Fed put".
- Article from:
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Federal Reserve Bank of St. Louis Review
- Article date:
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March 1, 2008
- Author:
- Poole, William
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Copyright informationCOPYRIGHT 2008 Federal Reserve Bank of St. Louis. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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This article was originally presented as a speech at the Cato Institute, Washington, D.C., November 30, 2007.
Federal Reserve Bank of St. Louis Review, March/April 2008, 90(2), pp. 65-73.
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Federal Reserve policy actions starting this past August to temper strains in financial markets have generated considerable commentary, some of which reflect concerns that policy action in such circumstances creates moral hazard. The issue is extremely important, and, given that it is so current, this is a good time to reflect in general on the Fed's reactions to financial market developments. The concern over moral hazard is that monetary policy action to alleviate ...