Today on the Eurozone Crisis
Via Scoop.it – #GreekCrisis
“He strongly praises Ben Bernanke, for having the Fed greatly expand its balance sheet. Because it has long-term, risky assets (mortgage securities) and short-term riskless liabilities (bank reserves), the rest of the financial sector can do the opposite.
Implicit in Cowen’s point of view is the assumption that what we need to avoid right now is a shrinking banking sector. I find that notion hard to swallow. My view on fiscal policy is similar. There are those who argue that now is not the time to cut government deficits, because that would be contractionary. My reaction on cutting back both bloated banking and bloated deficits: if not now, when?”