The world has split between
1. Must do something
Fed + ECB
2. Must not encourage the next crisis
Uk + Canada
Its covered well here
http://www.ft.com/cms/s/0/bf6f5bdc-615e ... fd2ac.html
Quote:
The provision of large liquidity facilities penalises those financial institutions that sat out the dance, encourages herd behaviour and increases the intensity of future crises,” he added. Central banks should not “sensibly entertain” such cash injections just to maintain the status quo,
I must say the Bank of England has a good point but the massive hike in Libor in the absence of liquidity will cause much pain in the UK in the next year or so...if its maintained at that high spread off base.
