The New New Deal

Roubini, Nouriel
October 2008
Forbes Asia;10/27/2008, Vol. 4 Issue 18, p78
The article presents the author's opinion on the coordinated monetary policy rate cut. He considers the 50 basis points (bps) cut in policy rates by the U.S. Federal Bank and European Banks as too little and too late. He states 150bps is necessary to restart the U.S. economy and unclog the frozen financial markets. Policy rate cuts have limited effect as they do not resolve the counterparty risk problem in markets. He states the need of a generalized temporary blanket of all deposits.


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