Center for Financial Stability President Discusses the Era of "Never Befores" (with Lofchie Comment)
At the annual Capital Markets Credit Analysts Society dinner, President of the Center for Financial Stability Lawrence Goodman delivered remarks on future challenges facing global markets.
Mr. Goodman explained how a series of "never before" challenges will impact markets. "Never before," he said, has there been such:
- large-scale intervention by central banks;
- growth in the financial regulator apparatus and in the labyrinth of rules governing markets; and
- distortion across a wide range of financial markets.
Mr. Goodman sees "three potential pathways for the future": (i) a growth solution, (ii) a "game remains the same" scenario, and (iii) an unwind scenario. He stated that global markets are likely to migrate from the "game remains the same" into the "unwind" scenario within the next 12 to 18 months. A series of early warning indicators will help to navigate which scenario unfolds over time, he stated.
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