ECB Reflections on THE Exit Strategery

To:  inflationistas hyperventilating about hyperinflation

From:  Austrians & Socionomists versed in historical precedent, with actual methodology and an analytic-leg to stand on

Before delving into Lorenzo Bini Smaghi's noteworthy speech, chock full of ECB insight, please permit a wee bit of deflationist rant 'Through the Looking-Glass' of social mood as per:

[1]  the management of inflation expectations;

[2]  the implications within central bank (CB) exit strategery; and

[3]  'what Alice is likely to find' in Mr. Market's immediate future.


Inflation ?  Let me know when and where you find it in the US, ok ?

3/13 month M2, staggered M3, hell recreate your own M5 ... you simply cannot counter with a valid argument that does not shortly resort to:

'yeah, but.  it's coming.  somewhere.  you'll see.  just you wait.  in a flash.  soon.'

What is so difficult to see / understand about how targeted inflationary pressures can be used as simple (Gulliver) ropes to hold back the brunt of crushing deflation while obfuscating underlying 'realities' of econometric measurement ... everywhere ?

I suppose it is the all-encompassing belief in the power of the shiny, yellow metal (gold) that you can't eat and which has zero intrinsic value outside of that which is imbued upon it ... by what ~ how you / we feel about its prospects.


Next up:  those who have conniptions about "how / why" Uncle Ben Shalom (Bernanke) is a moron.

Really now ??

Look: Tiny Tim (Geithner) is decent enough, no Hanky Panky from the Farm at 85 Broad, but certainly decent enough; and Greenspan was a true hustler's hustler (suggest examining Al's statements of the past few years a wee bit closer); but Bernake ... ohhh, sweet Uncle Ben was born & bred for this very role.

Bernanke's entire modern career has been spent fostering a rock-solid avatar of Textron-ity; he gave himself his own nickname!  Ben has everyone so thoroughly confused / misdirected as to his Intermediate intention (and the underlying motif within official policy direction) as per the $USD & QE 2.0 tightening that he has done his job; and masterfully so.  Such is his job; the BoE's Mervyn King explicitly outlined such obfuscatory CB playbook strategery almost a decade ago.


Wanna get fundamental ?

Look 2 Q's out / 4 meetings forward and try to write the FOMC minutes ... what do you see ?

Ahhh, multivariate quantification and numerical metrics are needed; not just emotionally-laden adjectives echoed by every Joe da Plumber and Sarah Pale Eyes.


Fed policy is a battleship that takes time to turn, especially since the Fed doesn't actually steer the ship ... they just talk about alleged "reasons" (like the "news"), while keeping the public fixated on the back door as they walk right out the front with Manet's and Monet's in tow, under the innocuous cover of broad daylight ~ like the professional thieves that they are.



ARTINFO  12.7.09 

Italian Police Discover Disgraced Parmalat Founder’s Secret Art Trove

ROME - As recently as last week, Parmalat founder Calisto Tanzi denied owning any valuable art in interviews with investigators attempting to recover billions lost by investors after the company collapsed in the midst of a massive fraud scandal in 2003. But now, investigators say that they have uncovered a secret collection of 19 prized paintings that could be valued at as much as €100 million ($147 million).


As a result of telephone wiretaps, investigators say they have evidence that Tanzi was in secret negotiations to sell many of the works, which include pieces by Picasso, Monet, Manet, and Degas, to an unnamed Russian millionaire. Using that information, Italian police uncovered the works over the past few days stashed away in the basements and attics of three apartments in Parma, Italy, belonging to friends of Tanzi.


Telegraph  12.5.09

Italian police seize £90m art stash from Parmalat founder

Italian police seized a stash of art masterpieces worth more than £90 million from Calisto Tanzi, the disgraced founder of the Parmalat business empire which collapsed owing millions to small investors.


Among the 19 masterpieces were paintings by some of the world's most famous artists, including Van Gogh, Picasso, Monet, Cezanne, Modigliani, Manet and Degas.


They allegedly belonged to the multi-millionaire businessman Calisto Tanzi, the founder of the Parmalat dairy empire, which collapsed in 2003 with billions of pounds of debt....


Italian courts have ruled that Tanzi bore the brunt of responsibility for the corporate catastrophe, in which many investors lost their life savings. He has been convicted of market-rigging.


Italian tax police found the artworks stashed in the basements and attics of three apartments in Parma, in northern Italy.


Mr Tanzi had reportedly told Guardia di Finanza police and tax investigators as recently as Monday, during a lengthy questioning, that he owned no such assets.


They included a portrait of a ballerina by Degas, The Cliffs at Pourville by Monet, still lifes by Gauguin and Van Gogh, a 1944 Picasso, a water colour by Cezanne and a pastel by Pizarro....


If confirmed to be owned by Mr Tanzi, the art works could go some way to satisfying creditors' demands in the wake of Europe's biggest bankruptcy.


Among the hardest hit victims of the collapse, which shocked Italy's business establishment, were the thousands of ordinary Italians who were convinced that buying bonds in the company was a safe investment.


The crisis erupted in December 2003, when Parmalat said a bank account holding four billion euros (£3.6 billion) held by a Cayman Islands unit did not exist, forcing management to seek bankruptcy protection and triggering a criminal fraud probe.


The food giant collapsed shortly afterwards with a 14 billion euro hole in its accounts.


Parmalat emerged from bankruptcy in 2005, after being stripped of its loss-making foreign units, and has refocused on its core dairy business.


Mr Tanzi and other former executives were charged with market rigging, false accounting and misleading Italy's stock market regulator.


Gee wiz, how could U.S. "regulators" ever have anticipated the tenor of AIG's dealings with Gen Re, Berkshire and Prudential ?  Packaged in the middle of the night like Art Modell's bounce up outta Cleveland, few in the MSM made note of the tidy timing of the DoJ press release; sent in virtual lockstep with 'updated' enforcement rules of utter and complete subjectivity.  But then again, what can you really expect from a Fourth Estate which, so smitten with Gurgle (GOOG) and the Cult of Cupertino (AAPL), fails to note that the Monroe Doctrine: Redux has been actively employed.


So: what is the practical intent of the Fed / Treasury hydra's fire-hose of liquidity provided ? 

Their provided liquidity, which is effectively a series of targeted credits for financial intermediaries and not paper for circulation, is by implicit design 'inflationary' so as to explicitly obfuscate the underlying specter of all-encompassing deflation.  As such, it has nothing to do with either core inflation or inflationary pressures throughout the system writ large.


A key fact oft-ignored by Gold Bugs is that ya buy Au when there is actual inflation, not just inflationary expectations from always incorrect John Q. Public.  Long-term secular bull notwithstanding, gold is currently caught between a credit crisis / currency crisis on the left and a Godzilla-esque deflationary depression on the right.  The hard right edge (the next bar on any chart) is enamored with uber DE-flation, while most individuals remain enamored with a shiny, yellow metal that they can't eat ... though it is fungible ~ a fact lost on pension / endowment fund BOD's doggy-paddling in the quicksand of commercial real estate. 


Moreover, every single incessant utterance of "dollar be dead" simply serves to underscore its speaker's / writer's failure to understand not only the concept of the inflation-adjusted Real Dow but also (and much more importantly) how central banks, FX cross rates, Domestic Repos, CB Swap Lines, Uncle Ben, Tiny Tim and the very concept of endogenously regulated collective social mood are each inherently intertwined.


The Real Dow (DJIA / Gold) is down c. 80% in the past decade, which is the largest "real" crash since the London Stock Exchange (LSE) crashed 98% between 1720 - 1722 on arithmetic scale.  Inflation is in a secular bull that took the hell off in '99 / '01.  That said, the outlook for the immediate and Intermediate term (6 - 16 months) is nothing but extreme DEflationary depression.


Now, while everyone hyperventilates about hyper-inflation like John Williams, those of us with [1] historical knowledge, which predates the scroll on their Yahoo Finance "charts", and [2] an actual understanding of causality / social mood, are left scratching our heads about how supremely misplaced folks' attention is right now.  But what else is new!


Wake up and smell the tulips people !

Official Fed policy is a battleship that cannot be turned on a dime.  Well, it can be turned on a dime, but it 'ought' not do so; hence the lonely pedestal that Volcker's draw of the straw placed upon him.  It takes time to 'steer the ship', especially when it has NO steering wheel and its captain (who simply navigates the waters around him) has convinced each and every passenger on deck the he, and only he, has:

(1)  any idea how to effectively steer the ship;

(2)  a steering wheel that allows him to gently guide its course; and

(3)  a Na'vi navigation system that tells him when / where the next tsunami of social mood will originate.


In reality (depending upon which side of The Matrix that are capital markets you hail from), the Fed has very, very little sway over free, yes, free market rates that the public determines in aggregate.  The Fed's Plunge Protection Team (PPT) (and related legion of investment bank / primary broker-dealer minions) does help massage / exacerbate existing trends but it cannot alter the course of social mood or how it (always) leads price action across Primary degree market direction.


Yes: even the President's Working Group on Markets ~ the Plunge Protection Team (the absolute tip of the government's "protective" spear) is but a slave to social mood and its endogenously (internally, from within) regulated, patterned rhythms.  That said: both the Fed-Treasury Hydra and its PPT Field Commanders have effected exceptionally aggressive tactics, which are wholly un-original.  Such is the underlying motif within Bini Smagh's speech below and the reason for this highlight; it speaks to current CB playbook strategery.



But who the hell am I to say what the underlying motif of overarching central bank policy is?  What did Brian P. Sack, Executive Vice President, have to say about managing expectations a few weeks ago at the 'National Association for Business Economics Policy Conference' in Arlington, VA.  Why Brian Sack?  Because when minds like Tyler Durden of Zero Hedge believe that:

" Brian is the de-facto head of the Fed's "markets group" operation located on the 9th Floor of Liberty 33.  If there is indeed a Plunge Protection Team, Brian is likely the PM who runs it. "

.... it is probably a good idea to examine Mr. Sack's insights about how "The Fed will be embarking on a tightening cycle like no other in its history."  Italics / underline added for visual ease.

" Market Conditions: At Risk on Exit?

Finally, let me turn to conditions in financial markets and discuss whether there may be vulnerabilities related to the Fed's exit from the current monetary policy stance. I think there are two potential areas of concern.

The first potential concern is that the exit strategy could simply cause confusion among market participants, prompting volatility in asset prices. As noted earlier, this tightening cycle, when it arrives, will be more complicated than past cycles, as there will be more decision points facing policymakers. With more decision points come more opportunities for the markets to be confused by our actions. The recent changes to the discount rate and the Treasury's Supplementary Financing Program balances highlight this concern, as the amount of attention that those actions received was outsized relative to their significance for the economy or for the path of short-term interest rates.

The burden is on the Fed to mitigate this risk by communicating clearly about its policy intentions and the purpose of any operational moves it might take. In this regard, the forward-looking policy language that the FOMC is currently using in its statement is important. I would argue that this language contains much more direct and valuable information about the likely path of the short-term interest rate target than does any decision about draining reserves. Indeed, it will be difficult for market participants to make precise inferences about the timing of increases in the target interest rate from the patterns of reserve draining alone, in part because the FOMC has not specified the path of reserves it intends to achieve before raising interest rates.

The second potential concern that some may have is whether the markets have adequately priced in the exit strategy. However, a few considerations should limit this concern. Most important, the current configuration of yields and asset prices incorporates expectations that short-term interest rates will begin to rise around the end of this year. Thus, the markets seem prepared for the risks toward tighter policy. Moreover, looking out to longer maturities, the shape of the Treasury yield curve appears to incorporate not only expectations of policy tightening, but a decent-sized term premium on longer-term securities. Indeed, the term premium is well above the levels observed over most of the past several years, even though inflation is likely to be low and upside inflation risks are limited. This should help to diminish the chances of a sizable upward shift in yields....


In conclusion, the exit from the various liquidity facilities that the Federal Reserve implemented has been very successful, as the up-front design of those facilities reduced the need to actively manage the end of those programs. However, the exit from the current stance of monetary policy is quite different, in that it will have to be actively managed to ensure a smooth exit.

.... Overall, an approach along these lines should help to ensure a smooth exit from the current accommodative stance of monetary policy. Moreover, if the Fed's intentions are well communicated to the financial market participants, they too should be fully prepared and in the best possible shape for navigating this exit. "


And while everyone and their mother continue to rather cheaply cite the Weimar Republic, Zimbabwe and the video game Populous to topically relate to one another through collectively shared emotions, which are extremely palpable ... these folks fail to understand that such intense bouts of deflationary recession / depression (we are currently mired within a full-blown DEflationary depression of Grand Supercycle degree ~ c. 300 years) are not only recurringly 'commonplace' but also that such faux-inflationary incantations / uber-deflationary iterations have been ameliorated the exact same ways for well over 400 years, which is being rather conservative without citing the unparalleled research of Armstrong, Kindleberger, Prechter and Rogoff.


'For those who have Charles P. Kindleberger's "Manias, Panics, and Crashes: A History of Financial Crises" somewhere inside of a cobweb-laden cardboard box in their attic, please see pages 249 - 274 (updated Fifth Edition) within Chapter 12: The International Lender of Last Resort.

And for those who had a life during college here are a few papers from Scribd, which quote the gist of 'it' ...

The Dutch Monetary Environment During Tulip Mania

This Time is Different: 800 yrs of Financial Folly

Crises in the Global Economy From Tulips to Today: Contagion and Consequences

Economic and Financial Crises and Transformations in Sixteenth-Century Europe.


See if you can dig up what Uncle Al's "lost" 'thesis' was about.  I'll save you the trouble: it's centered on today, what we face right now; well, June 2006, to be precise.  It is a rigorous analysis (copied and pasted from the work of many others) that details how to "employ" inflationary tactics and explicitly covert inter-market stabilization efforts across specifically timed interval periods, at specifically quantifiable 'points' within collective social mood during a deflationary depression (of Supercycle or Grand Supercycle degree).


C'mon, you really, really think the Maestro was that dumb ?

Uncle Ben too Seriously ?

You think "we're becoming Japan", without thinking about Japan as our test run ??

One has nothing to do with the other and the fact remains that ... while the Fed holds dramatic sway over the influence of market participants' opinions ... it has very, very little control (not influence, but control) over actual market direction.  The Fed, just like every single one of us, is almost entirely dependant upon the direction, development and tenor of collective social mood.


Don't take my word for it ... just read Uncle Al's comments / speeches of the past 5 years, which explicitly quote Socionomic Theory damn near verbatim.  It really is too bad that Greenspan and Mandelbrot never worked together; if so, those two serial plagiarists might've been able to re-master a Vanilla Ice-remix of Edward de Vere's greatest works as well.

' Let me not to the marriage of plagiarist minds admit source attribution '


Tortuously fractal rant over!  Wha'd Bini Smaghi of the ECB have to say already ?



Speech by Lorenzo Bini Smaghi, Member of the Executive Board of the ECB
Sveriges Riksbank, Stockholm, 21 January 2010


A lot of attention has been devoted in recent policy discussions to the exit strategy from the expansionary monetary and fiscal policy stance adopted since the outbreak of the crisis, and to the interaction between the two. Designing an optimal exit strategy should, in theory, not be too difficult. In an ideal world, fiscal stimuli should be withdrawn before monetary policy is tightened in order to ensure that public debt remains sustainable and that monetary policy is not overburdened.


We know however that first-best solutions are often hard to implement, because they are based on unrealistic assumptions relating in particular to the rationality of expectations and the ability of policy-makers to rapidly make decisions and to change them if needed. Furthermore, policy-makers have to take account of the prevailing uncertainty and of the impact of their decisions on agents’ expectations. For instance, fiscal policy is normally decided once a year, through an elaborate budget process, but is not implemented until the following year. This process introduces significant rigidities into the decision-making and makes it somewhat less likely that fiscal policy can exit before monetary policy, which is typically a much more flexible instrument.


Today I would like to focus my remarks on the exit from the accommodative stance of monetary policy. I will not consider the phasing-out of the non-standard measures that central banks have adopted over the last few months.


The discussions so far have centred mainly on the timing of the exit decision, which should neither be premature nor tardy. There are counter-effects in both scenarios. If the decision to exit is made too early, the economic recovery may be put at risk, as higher interest rates will produce a tightening effect on consumption and investment decisions at the very time when the pick-up in the economy is still fragile. Furthermore, it might further restrict credit conditions while the banking system is still restructuring its balance sheet. If, on the other hand, the decision is taken too late, monetary conditions will remain too lax for too long, sowing the seeds of the next crisis. In addition, the later the tightening, the sharper it needs to be, thus producing valuation changes that may reduce banks’ profitability and undermine their ability to support the economic recovery.


Given the difficulty of the timing, the discussion has turned to the second-best option. In other words, which of the two risks – being too early or being too late – would pose the biggest problems for the economy? Several authors, including international organisations, have suggested that the policy authorities should err on the side of being late. They argue that an early tightening is difficult to reverse and tends to hit the economy early in its recovery, and may give rise to a double-dip recession. On the other hand, a late tightening allows more time to bring things back to normal. In addition, the stronger the economy is likely to be, the more resistant it will be to the shock produced by the tightening of monetary conditions.


Overall, history shows that policy authorities have largely erred on the side of being too late than of being too early. Indeed, late exits have been quite numerous; they were either the result of deliberate policy decisions to boost the economy, which was probably the case in the 1970s and early 1980s, or of forecast errors made in over-estimating deflationary risks and under-predicting the subsequent recovery, which might be the case of the decade just ended. [1]


The monetary and fiscal policy tightening that took place in the United States in 1936, which led to the 1937-38 recession, is regarded as a text-book example of too early an exit, of a mistake not to be repeated. There are not many other examples of early exits. The slight increase in interest rates by the Bank of Japan in 2000 has been considered by some as an early exit, but recent analysis has downplayed it. [2]

To sum up, experience suggests that what matters most in any exit strategy is that markets are well prepared, so that when the decision is ultimately made they are not taken by surprise and suffer negative repercussions. Communicating an exit strategy is, in the end, not that different from communicating monetary policy in normal times. Given the state of uncertainty about the recovery, market participants have to base their expectations, and their trading decisions, on projected economic fundamentals rather than trying to read between the lines of policy announcements.



In this context, it is worth mentioning the 1994 episode, when the Fed’s 25-basis-point increase in its funds rate caused turmoil in the bond market. Even with the benefit of hindsight, that decision can be regarded as neither tardy nor brutal. The problem was that it took markets by surprise and led to a major reassessment of the yield curve, with substantial valuation losses on long-term positions.


These experiences confirm that not only is the timing of the exit crucial, but also its communication to market participants. Indeed, the impact of any withdrawal of monetary stimulus on financial market participants depends on whether they have fully anticipated it. If they have, then the decision tends to have less impact on the yield curve, and thus on the valuation of banks’ assets and on the rate that banks charge to their customers, especially on fixed rate loans. As confirmed by a growing body of literature, the main mistake relating to the 1936-37 decisions was that they were badly communicated to economic agents. [3]


To sum up, a key element of the exit strategy is that the policy authorities must guide expectations. How can they do this?


Let me first of all consider how it should not be done.


First, it may be better for central banks not to become embroiled in the debate on whether exiting too early or too late is better or worse, and especially not to give signals that the latter is less risky. Such an approach could encourage market participants to become less risk-averse and to expect the period of low interest rates to be extended beyond what is necessary. This would induce them to take on further risks, in particular in terms of maturity mismatches – borrowing short-term to buy long-term bonds – which might be profitable in the short term but could lead to substantial capital losses when the exit takes place.


Second, any commitment to prolonged periods of low interest rates is risky. If the aim is to lower long-term rates, it may also encourage market participants to take substantial long positions in the fixed income market. As a result, the risk of major losses arising at the time of the exit increases considerably, as the 1994 experience shows. This may induce the central bank to further delay the exit to avoid penalising banks. This seems to be the experience of 2002-2004. As a result, interest rates may remain below the desired level for too long, fuelling a possible bubble.


Third, central banks need to be very careful in using information extracted from market data when conducting monetary policy. The anchoring of inflation expectations is a very important benchmark for assessing whether the stance of monetary policy has become too expansionary and whether there are risks of falling behind the curve. However, the pre-crisis period and the crisis itself have shown that expectations are not always formed in a rational way and might themselves be influenced by the behaviour of the monetary authorities. Quite often markets participants form their expectations by looking at central banks’ behaviour, on the assumption that the latter have better and more information about underlying inflationary pressures. Under these circumstances, market-based inflation forecasts tend to be biased and may react in a perverse way following a tightening of monetary policy. In particular, inflation expectations may be revised up, rather than down, after an interest rate increase, especially at the beginning of a tightening cycle. If the monetary authorities’ assumption that inflation expectations are well anchored proves to be wrong, the whole yield curve might move upwards and the decision to increase the rate of interest may result in a much sharper tightening than expected. [4]


Another problem with inflation expectations concerns their measurement, especially in periods of financial turbulence, when the liquidity of the underlying instruments can affect their signalling content. A further distortion may arise when the central bank is itself a major buyer and holder of indexed-linked assets, which may distort prices and thus the information content. Measurement problems arise also with other components of the analytical framework, such as the output gap. Experience shows that measurement of the output gap varies over time. For instance, when measured ex post, with the data available until 2008, the US output gap over the period 2002-2004 turned out to be very small, even non-existent, while ex ante it was estimated at around 2% of GDP. [5]


So what should a central bank do to implement and communicate an appropriate exit strategy? Let me make a few comments on this.


To ensure that the exit strategy does not come as a complete surprise, it has to be well communicated. Over recent months, central banks have devoted a lot of time to explaining their exit strategies, both in terms of content and conditions. At the ECB we have made it clear that, as in the past, any decision – even one concerning the exit – will be linked to the underlying economic conditions and in particular to the re-emergence of inflationary pressures. Market participants should thus form their expectations on future interest rates on the basis of projected economic developments rather than on specific unconditional commitments.


In order to promote understanding of how monetary policy needs to adapt to changing economic conditions, and eventually exit from its very accommodative stance, central banks would do well to explain how the stance itself is affected not only by the level of the interest rate they control, but also by the underlying economic developments, such as projected growth and inflation. In this respect, it is interesting to note that over the last six months, while economic activity and inflation have picked up, interest rates, both in nominal and real terms, have continued to fall. Spreads on different types of bond, except those of some governments, have continued to come down. The slope of the yield curve has slightly increased, in particular in the US (see Annex).


Finally, an exit is more easily communicated, and understood, by market participants if it is gradual. Any interest rate adjustment – even a slight one – entails some form of discontinuity, which may affect the whole yield curve. A credible gradual exit, if well communicated, minimises shocks to interest rate expectations. However, a gradual exit strategy is more likely to be credible if it is implemented in a timely way. If it gives the appearance of being late, the first step by the central bank is likely to cause a substantial revision of interest rate expectations and thus of the yield curve, strengthening the impact of the tightening.


In fact, examining closely the 1936 episode in the US, it might not even be considered as an early exit. The very restrictive monetary and fiscal policies that were adopted at that time might deserve to be categorised as a case of ‘brutal’ exit, the effects of which could in fact have occurred at any time, exit or no exit. Between mid-1936 and early 1937 reserve requirements for banks were doubled in a series of three steps. The general government budget contracted by almost 4% of GDP. These measures appear to have been disproportionate, even with an economy that had started to recover, with inflation picking up and credit aggregates accelerating. The severe negative effects of these measures do not mean that no measure should have been taken at all. They should simply not have been so abrupt and not have taken economic agents by surprise. In other words, the 1936 episode might be considered as an example of a badly calibrated and badly communicated exit, rather than a wrongly timed exit.


ECB -1- Economic growth reached its t[r]ough in 2009 Q1 and now 
displays a slow recovery

ECB -2- ECB interest rates and the EONIA

ECB -3- Credit spreads decreased rapidly in the euro area (basis 

ECB -4- Corporate bond spreads in the euro area (basis points)

ECB -5- Corporate bond spreads in the United States (basis 

ECB -6- MA bank lending rates in the euro area (percentages per 

ECB -7- Bank lending rates on loans to non-financial corporations 
in the euro area (pencetages per annum)

ECB -8- Bank lending rates on loans to households in the euro area
 (percentages per annum)

ECB -9- Real overall costs of financing (percentages)

ECB -10- Nominal implied forward curves for the euro area and the 
United States (percent per annum)

ECB -11- Break-even inflation rates in the euro area and the 
United States (pecent per annum)



[1Ben Bernanke, “Monetary Policy and the Housing Bubble”, speech at the Annual Meeting of the American Economic Association, Atlanta, Georgia, 3 January 2010.

[2]  Daniel Leigh, “Monetary Policy and the Lost: Decade: Lessons from Japan, IMF Working paper, October 2009.

[3G. Eggertsson and B. Pugsley, “The mistake of 1937: a General Equilibrium Analysis”, CFS Working paper, November 2006.

[4]  L. Bini Smaghi, “An Ocean Apart: Comparing Transatlantic Responses to the Financial Crisis”, Rome, September 2009.

[5L. Bini Smaghi, “Monetary Policy and Asset Prices”, Freiburg, October 2009.


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