Financial markets and the post-crisis scenario |
| |
Authors: | Michele Bagella Rocco Ciciretti |
| |
Institution: | (1) School of Economics, University of Roma Tor Vergata, Rome, Italy;(2) SEFeMEQ Department, University of Roma Tor Vergata, Rome, Italy |
| |
Abstract: | Starting from August 2007, the FED intervened by injecting liquidity in the inter-banking market and reducing interest rates.
Day after day, the financial markets register negative trends and rallies. This is not due to events which are particularly
related to the market itself. This appeared in the days when there were government interventions, when everybody expected
a positive sign in the financial market but a negative sign occurred. Sometimes, this is due to the intensity of actions taken
by the governments. The markets always expect appropriate interventions (in terms of intensity). Looking at these market reactions
(in unexpected signs) after each government action, we can suppose that policy makers underestimate the intensity of this
crisis. The capacity of making enforcement on the system should avoid underlining the side of governance rules which will
never be precise. Being able to count on an active control of the market dealers, broadly speaking is a way of giving active
confidence to individual/institutional agents who decide the allocations of saving in the financial market. There is no such
confidence at the moment, if one focuses only on the definitions of new rules. If one starts from existing rules and does
continuous monitoring so that they are applied adequately at crucial moments, then one could reduce the possibility of facing
new exceeding volatilities of banking securities in the stock market. This work is focused on understanding how governance
as well as central banks’ policy impact on the crisis, as well as possible future scenarios.
|
| |
Keywords: | Central banks Financial markets Governance |
本文献已被 SpringerLink 等数据库收录! |
|