Rules must match lenience of lending: Fed's Lacker
A critical policy challenge in the aftermath of the credit crisis will be to re-establish the boundaries of central bank lending, said Jeffrey Lacker, the president of the Richmond Federal Reserve.
Lacker said that the prime issue was to match the stringency of regulatory and supervisory oversight with the level of access to central bank credit so as to contain moral hazard effectively.
The dramatic expansion in the Fed's lending, and government support more broadly, had, he said, extended
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