Banks must be scolded, not helped, by the Fed

- Central Banking staff
- 23 Jan 2008

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Monetary and regulatory policy should be about reinforcing solid conduct in financial markets and punishing bad behaviour. But the recent rate cut from the Fed does little of the sort, says Avinash Persaud, the chairman of Intelligence Capital, a financial advisory firm.

By delivering a large rate cut one week before the scheduled end-January policy meeting, just as attention was drawn to plummeting share prices, the Fed has once more given the impression that it is led by the equity markets.

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