I see this as an important shortcoming of the pre-crisis corridor regime that does not get sufficient attention. Having the ability to introduce broad and credible lender-of-last-resort backstops
The Fed, Dudley, justifying the lender of last resort. He does not know that currency banking requires currency risk, loss and gains from innovative shocks. Lender of last resorts is a promise by Congress to absorb the potential losses and mark it to market once per generation, with generational default.
The effect is plainly visible in all the inflation adjustments in government programs,
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