Financial Crises

Audio

Media Conference Call: Benn Steil on Federal Reserve Exit Strategy

Speaker: Benn Steil
Presider: Michelle Caruso-Cabrera

The prospective challenge of containing inflation, buttressing a collapsed housing market, and normalizing the Federal Reserve's bloated balance sheet has created an "exit strategy" dilemma for Chairman Ben Bernanke. CFR Director of International Economics Benn Steil urges the Federal Reserve to swap mortgage-backed securities with the U.S. Treasury in exchange for Treasury securities, which the Fed can then sell as part of a normal process of monetary tightening.

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Transcript

Media Conference Call: Benn Steil on Federal Reserve Exit Strategy

Speaker: Benn Steil
Presider: Michelle Caruso-Cabrera

CFR Director of International Economics Benn Steil urges the Federal Reserve to swap mortgage-backed securities with the U.S. Treasury in exchange for Treasury securities, which the Fed can then sell as part of a normal process of monetary tightening as a solution for the prospective challenge of containing inflation, buttressing a collapsed housing market, and normalizing its bloated balance sheet.

See more in Financial Crises; United States

Op-Ed

Bernanke Should Follow the Advice He Gave to Japan

Authors: Benn Steil and Dinah Walker
Wall Street Journal

Benn Steil and Dinah Walker explain why the Fed's massive holdings of mortgage-backed securities (MBS) are distorting its thinking about the conduct of monetary policy going forward. They propose a novel plan to rectify this, in which the Fed swaps its MBS with the Treasury in return for Treasury securities, which the Fed can sell as part of a normal "exit" from monetary stimulus.

See more in United States; Financial Crises; Monetary Policy

Ask CFR Experts

Will "sequestration" lead to a more isolationist U.S. foreign policy?

Asked by Andreas Maldener, from Trier University

After more than a decade of war and several years of a deep financial crisis, many Americans are asking whether the country should focus more of its attention—and more of its resources—at home. That said, the impulse to lead is still strong in both political parties and most polls show that Americans still feel both a moral and strategic imperative to remain fully engaged in the world.

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See more in United States; Budget, Debt, and Deficits; Financial Crises

Ask CFR Experts

How long will it take southern Europe to rebound from the eurozone crisis, and how will that affect the rest of Europe?

Asked by Jackson Ryan, from King HS

The debt crisis that has hammered southern Europe since 2010 will have long-lived economic effects, despite the moderation in Spanish and Italian government borrowing costs since the European Central Bank's "Outright Monetary Transactions" initiative last September.

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See more in EU; Financial Crises

Interview

A Growth Strategy for Greece

George Papandreou interviewed by Christopher Alessi

The EU and IMF should loosen the austerity requirements of Greece's bailout package to allow the indebted country to implement needed growth-enhancing policies, says former prime minister George Papandreou.

See more in EU; Financial Crises; Greece

Ask CFR Experts Asked by Fagner Dantas, from Universidade Federal da Bahia

Globalization refers to the increasing ease with which goods, services, capital and people can move across the world, which has been accelerated by advances in technology and government policies to reduce barriers. In terms of reducing poverty in as many countries as possible, there is no question that globalizationcontinues to be beneficial, even after the 2008 financial crisis. Poverty continues to fall worldwide at a rapid rate, and countries most integrated into the world economy have seen the biggest reductions in poverty. But it is also true that even before the crisis, the gains from globalization were not spread evenly. Though millions have been lifted out of poverty and everyone benefits from cheaper consumer goods and the opening of new export markets, there are still winners and losers.

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See more in Global; Globalization; Financial Crises