Several years ago in Delhi, I called a pest control firm to treat my apartment for termites. A South Indian gentleman with a pleasing smile arrived with canisters of chemicals and a large syringe.
He went about his task meticulously. Each time he sprayed, a mist settled on everything. I asked whether this would really work. Breaking into a comforting grin, he said, “Sir, have no worry whatsoever. This is very strong stuff. It is totally banned in the United States.” I edged out of the room, as he reared the syringe to administer another dose.
I remembered this incident after I gave a lecture in Helsinki on global labor standards. As my talk concluded, I got into an animated debate with my audience on developing global standards for labor markets. A globalized world, with one country’s goods, capital, and pollution flowing into another, will inevitably need common norms and laws. But as my pest-control agent’s answer illustrated, one man’s poison can be another’s assurance. Common standards in a world as inequitable as ours will raise many contentious issues.
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If the US Federal Reserve raises its policy interest rate by as much as is necessary to rein in inflation, it will most likely further depress the market value of the long-duration securities parked on many banks' balance sheets. So be it.
thinks central banks can achieve both, despite the occurrence of a liquidity crisis amid high inflation.
Although Silicon Valley Bank was not deemed to be systemically important, its insolvency forced the US Federal Reserve to head off systemic contagion and exposed the inadequacy of the FDIC’s partial deposit insurance regime. The financial-stability framework adopted after the 2008 crisis obviously needs another overhaul.
considers what the bank’s failure should mean for the current financial-stability framework.
Several years ago in Delhi, I called a pest control firm to treat my apartment for termites. A South Indian gentleman with a pleasing smile arrived with canisters of chemicals and a large syringe.
He went about his task meticulously. Each time he sprayed, a mist settled on everything. I asked whether this would really work. Breaking into a comforting grin, he said, “Sir, have no worry whatsoever. This is very strong stuff. It is totally banned in the United States.” I edged out of the room, as he reared the syringe to administer another dose.
I remembered this incident after I gave a lecture in Helsinki on global labor standards. As my talk concluded, I got into an animated debate with my audience on developing global standards for labor markets. A globalized world, with one country’s goods, capital, and pollution flowing into another, will inevitably need common norms and laws. But as my pest-control agent’s answer illustrated, one man’s poison can be another’s assurance. Common standards in a world as inequitable as ours will raise many contentious issues.
To continue reading, register now.
Subscribe now for unlimited access to everything PS has to offer.
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