Breaking bubbles: funding gap

Hugo Dixon The Bank of England has missed a trick on pricking bubbles. The UK central bank has fallen into an all-too-common trap of focussing on capital surcharges for banks as a way of preventing future financial parties getting too rowdy. Capital buffers certainly need strengthening. But so does liquidity. Yet again, funding is being virtually ignored. The BoE is the latest to wade into the debate about what is known in the jargon as “macroprudential” policy. That means how authorities can ...