Monetary Policy and Financial Stability in Extraordinary Times

Two very large shocks have hit the economy: the financial crisis saw the banking system come close to collapse and unleashed a hit to confidence and to credit availability; more recently commodity, energy and food prices have increased very sharply. The first shock is deflationary; the second inflationary. David Miles will consider how best to set monetary policy in the wake of these shocks. He will also analyse how regulation and monetary policy can most effectively reduce the likelihood of future financial instability. Central to this are the costs and benefits of having banks finance less of their lending from debt and more from equity