Tuesday, August 31, 2010

Bank of England will use 'all powers' to stave off any future crisis

From the UK Telegraph: In a major position paper, Charles Bean (Deputy Governor) said that the Bank had been powerless to prevent what he called the "Great Contraction" of 2008 because control of interest rates was not, in itself, a powerful enough tool.
He also hinted that the days of quantitative easing may not be over: "The deleveraging process is incomplete, the recovery remains fragile and a considerable margin of spare capacity is yet to be worked off," he said. "Further policy action may yet be necessary to keep the recovery on track."

He was speaking at the Jackson Hole Economic Policy Symposium in America the day after the Federal Reserve chairman, Ben Bernanke, buoyed the markets with an upbeat assessment of the US's growth prospects.

Mr Bernanke also hinted that he was prepared to employ more asset purchases if necessary.....read on

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