Monday, November 5, 2007

excessive financial behavior” that led to the U.S. home-loan crisis

Some BOJ Members Said Subprime Crisis Was Caused by Low Rates

Some Bank of Japan board members said the U.S. subprime mortgage collapse was caused by keeping interest rates too low for too long, September policy meeting minutes show.

Posted by chris @ 12:55 AM (469 views)
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2 thoughts on “excessive financial behavior” that led to the U.S. home-loan crisis

  • “All good central banks are forward-looking but they’re caught between the short-term circumstances and long-term risks”

    They’re right, of course.

    In 2003 the then governor of the BoE Eddie George advocated a policy to lower rates to prevent a recession, knowing that it would create an asset bubble.

    Now, would you say that’s taking a long-term, or short-term view??

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  • The BoJ have kept their own interest rates at nearly zero and have allowed the whole world to borrow from them, so presumably they would know.

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