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Domestic lender when and how much?
There are several measures that banks have taken over the years to ensure they do not run the risk of overtrading; bank of England in 1772 used the selective limitation of discounts which was heavily criticized, the same bank used prorate discounts in 1797, tighten up on eligibility requirements for collateral is yet another measure and shortening the duration maturity of eligible bills. The concern on over trading by banks has led banks to behave like private institutions worried about their own safety rather than the stability of the system. This then raises the question, how much should the central bank expand the money supply?
A case in hand is the New York Fed that was operating under a directive from the Board of Governors in Washington that permitted it to buy $25 million of government bonds a week, though in 1929 the Fed defied this and bought more that the allowed limit and went further to advice the board to lift the limitation of $25 million per week. This was informed by the hard financial times that the country was undergoing prompting the general situations of discounts running off rapidly, interest rates falling...
The board reluctantly lifted that limitation taking into account these prevailing conditions.
When there is panic and the stock market is threatened with a crash then the amount is not the ultimate consideration here but more significantly the timing of the introduction or use of the lender of last resort. Most monetarists maintain that as long as money supply keeps increasing at a constant rate, then there is no need for the lender of last resort. This was backed by the observed inadequacy of open market operations weeks before the panic in 1929, a fact that enabled the New York banking system to take over the call loans of most of out-of-town banks, a fact that led to decline in prices of attached property and stocks hence leading to the depression. This shows the introduction of the bank of last resort was not timely but rather too early with catastrophic effect on value of property.
Timing hence comes in as the most important aspect in a crash situation since even if excess amount is poured out in the market, there are other techniques that can be employed to mop it us, yet once…
A case in hand is the New York Fed that was operating under a directive from the Board of Governors in Washington that permitted it to buy $25 million of government bonds a week, though in 1929 the Fed defied this and bought more that the allowed limit and went further to advice the board to lift the limitation of $25 million per week. This was informed by the hard financial times that the country was undergoing prompting the general situations of discounts running off rapidly, interest rates falling sharply, and hence the need for a lender of last resort. The board reluctantly lifted that limitation taking into account these prevailing conditions.
When there is panic and the stock market is threatened with a crash then the amount is not the ultimate consideration here but more significantly the timing of the introduction or use of the lender of last resort. Most monetarists maintain that as long as money supply keeps increasing at a constant rate, then there is no need for the lender of last resort. This was backed by the observed inadequacy of open market operations weeks before the panic in 1929, a fact that enabled the New York banking system to take over the call loans of most of out-of-town banks, a fact that led to decline in prices of attached property and stocks hence leading to the depression. This shows the introduction of the bank of last resort was not timely but rather too early with catastrophic effect on value of property.
Timing hence comes in as the most important aspect in a crash situation since even if excess amount is poured out in the market, there are other techniques that can be employed to mop it us, yet once the timing is wrong then the effect is irreversible or hard to reverse as was in 1929. Once a crash occurs, most monetarists advice that there should be long enough a wait for the insolvent firms to ground and fail totally, yet not too long such that the crisis spreads to the solvent firms that need liquidity and in effect precipitate a total collapse of the system. If the rescue from the government is brought in too early, there is a likelihood of helping further inflation as was in 1857, if the response is too slow it also leads to a deep crisis as was in 1873.
Domestic and External Factors on African Macroeconomic Formulation Domestic and External Factors on African Macroeconomic Formulation Growth, productivity and employment are the most common economic variables to reduce extreme poverty and break poverty trap. Report from World Bank in 2007 revealed that one percent in GDP growth results to 1.3% poverty decline in low-income countries. Moreover, development in the productive capacity leads to reduction in sustainable poverty. With improvement in the economic growth,
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The panels could also be assembled quickly often within a day. Some panels have an in-built wiring in them making the housing construction to be faster. The panelized off-site building technologies could also involve exterior wall of building designed to provide the load bearing structural support, and the panelized building system could be made of light gauge steel, timber, structural insulated panels (SIPs), non-structural or concrete, which could be