Monetary policy itself cannot sensibly be directed at reducing imbalances.

The substantial uncertainty about the path of asset price movements going forward necessarily reduces the case for altering policy in advance of the move.

Monetary policy itself cannot sensibly be directed at reducing imbalances.

There is a basic lesson on financial crises that governments tend to wait too long, underestimate the risks, want to do too little. And it ultimately gets away from them, and they end up spending more money, causing much more damage to the economy.

Financial crises require governments.

The government can help, but we need to make this transition now to a recovery led by private investment.

Looking past the immediate crisis, a more resilient system must be built on stronger and better designed shock absorbers, both in the major institutions and in the infrastructure of the financial system.