Tuesday, August 26, 2008

Criticism of Federal Reserve - Becoming Strident

Willem Buiter, Ex-Chief Economist at the European Bank for Reconstruction and Development criticized Fed in a paper "Central Banks and Financial Crises" presented at Jackson Hole economics symposium.

He charged the US Fed with messing up its response to the credit crisis and being close to and captured by interests on Wall street.

He argues that rate cuts the Fed has announced so far are due to Fed's desire to stop the slide in share prices, a desire that reflected too close proximity to Wall street.

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