The era when central banks could target inflation and assume that what was happening in asset and credit markets was no concern of theirs is over. Not only can asset prices be valued; they have to be, argues Martin Wolf
There is a way of making finance safe. But it would be radical: deposits would be 100 per cent reserve backed; and the liabilities of other investment vehicles would be adjusted for the market value of their assets at all times. Banking would disappear, argues Martin Wolf.
This recovery has been no accident. When central bank money is almost free, prices of risky assets are recovering, competitors have disappeared or are weakened, making money is a relatively simple matter for the strong survivors, argues Martin Wolf
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