Late last month, the Federal Reserve released the transcripts of meetings held by the policy-setting Federal Open Markets Committee in 2008, during the run-up to the financial crisis. Unfortunately, many of those reading the transcripts appear to be missing the big picture.
CAMBRIDGE – Late last month, the Federal Reserve released the transcripts of the Federal Open Markets Committee (the Fed’s monetary-policy-setting body) meetings from the run-up to the 2008 financial crisis. Unfortunately, too many reports on the transcripts miss the big picture. Criticizing the Fed for underestimating the dangers from the underground rumblings that were about to explode makes it seem that particular players just got it wrong. In fact, underestimating financial risk is a general problem – the rule, not the exception.
CAMBRIDGE – Late last month, the Federal Reserve released the transcripts of the Federal Open Markets Committee (the Fed’s monetary-policy-setting body) meetings from the run-up to the 2008 financial crisis. Unfortunately, too many reports on the transcripts miss the big picture. Criticizing the Fed for underestimating the dangers from the underground rumblings that were about to explode makes it seem that particular players just got it wrong. In fact, underestimating financial risk is a general problem – the rule, not the exception.