“The best way to reduce systemic risk is to give the risktakers the incentive to economize on risk. An extended liability regime for banking is a simple and elegant way to improve incentives. We should seriously consider it.” ~ Alexander William Salter
READ MORE“The Fed’s chief task is to restore its lost credibility. In retrospect, the switch to average inflation targeting was a mistake. It gave the Fed plausible deniability for noisier, less predictable policy.” ~ Alexander William Salter
READ MORE“These things happen, but they happen a lot to UK financial regulators, and Governor Bailey himself has presided over a good number of regulatory fiascos. In short, the crisis confirms that UK financial regulation is not fit for purpose.” ~ Kevin Dowd
READ MORE“Rather than crowding out the private sector with a CBDC, the government should let a thousand payment mechanisms bloom.” ~ William J. Luther
READ MORE“At some point, a CBDC that fails to provide a high degree of financial privacy will be used to monitor and censor the transactions of one’s political enemies. It is foolish to think otherwise.” ~ William J. Luther
READ MORE“Even the best set of rules and the tightest, most targeted, narrowly circumscribed mandate won’t be enough unless central bankers are willing to emulate something akin to judicial restraint.” ~ Samuel Gregg
READ MORE“Monetary policy is about money, not interest rates. Central bankers should stop trying to implement monetary policy by messing with relative prices. There are better measures and more effective transmission mechanisms.” ~ Alexander William Salter
READ MORE“Despite the arguments made against monopoly and the arguments made in favor of competition, there is one monopoly that largely goes unquestioned. I’m referring, of course, to the monopoly over currency issuance.” ~ Joshua R. Hendrickson
READ MORE“While interest rates can sometimes be useful as a policy barometer, the various monetary measures (from the monetary base at narrowest to total nominal expenditures at broadest) matter far more.” ~ Alexander William Salter
READ MORE“The Hamilton-Bagehot rule was superior to the modern Fed practice of flooding the markets with cheap money because it allowed insolvent firms to go bankrupt while supplying emergency loans to troubled but solvent companies.” ~ Robert E. Wright
READ MORE“The Fed failed at its initial task of promoting financial stability. It has failed at conducting monetary policy as well. Given the Fed’s major financial-policy and monetary-policy errors since 2008, we should explore major structural changes.” ~ Alexander William Salter
READ MORE“We have to be very careful about generalizing across money and banking regimes. Many features of one system don’t translate to others. Depending on the ‘rules of the game,’ the supply of money responds to the price of money in very different ways.” ~ Alexander William Salter
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