Stabilizing The Future — John Cochrane
The Rasheed Griffith Show
00:00
Equity-Financed Banking and Systemic Stability
The chapter explores the concept of equity-financed banking as a solution to mitigate the risk of bank runs and enhance systemic stability in the financial system. It discusses the liability structure of banks and the importance of secure investments funded by deposits or long-term debt, proposing a vision for a robust financial system. Additionally, the chapter delves into the impact of the euro-dollar market on interest rate transmission in the US and the role of the Fed in maintaining stability, highlighting central bank independence as a mechanism for long-term economic benefits.
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