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Lessons from Crises, 1985-2014
Fischer, 2014 (SIEPR)1
S1. Fiscal policy also matters macroeconomically.
S2. Reaching the zero lower bound is not the end of expansionary monetary policy.
S3. The critical importance of having a strong and robust financial system.
S4. The strategy of going fast on bank restructuring and corp debt restructuring is much better than regulatory forbearance.
S5. It is critical to develop now the tools needed to deal with potential future crises without injecting public funds.
S6. The need for macroprudential supervision.
S7. The best time to deal with moral hazard is in designing the system, not in the midst of a crisis.
S8. Don't overestimate the benefits of waiting for the situation to clarify.
S9. Never forget the eternal verities---lessons from the IMF.
S10. "Never say never."
Central Bank Lessons from the Global Crisis
Fischer, 2011 (Bank of Israel)2
B1: Reaching the zero interest lower bound is not the end of expansionary monetary policy
B2: The critical importance of having a strong and robust financial system
B3: The need for macroprudential supervision
B4: Dealing with bubbles
B5: The lender of last resort, and too big to fail
B6: The importance of the exchange rate for a small open economy
B7: The eternal verities – lessons from the IMF
B8: Target inflation, flexibly
B9: In a crisis, you do not panic
B10: "Never say never"
10 Tentative Conclusions from the Past 3 Years
Fischer, 1999 (IMF)3
F1: It is very difficult to predict an economic crisis.
F2: It is hard to get countries to act even when you do see a crisis coming.
F3: It is hard to have a program implemented when the government you are dealing with is divided and weak, and, accordingly, it is difficult to decide whether to help.
F4: There is little understanding of the IMF's system of internal governance and accountability to its member governments.
F5: Keynesianism is alive.
F6: The strategy of going fast on bank restructuring and corp debt restructuring is much better than regulatory forbearance.
F7: Pegged exchange rate systems are crisis prone; crisis is more likely avoided if the rate floats.
F8: Globalization is here to stay.
F9: The need to involve the private sector in the solution of international crises is probably the most difficult issue in the international financial architecture.
F10: The IMF is here to stay.
1. Lecture delivered at Stanford Institute for Economic Policy Research, March 14, 2014. (http://siepr.stanford.edu/system/files/shared/events/FischerSpeech.pdf ) Return to text
2. Lecture delivered at the Bank of Israel, March 31, 2011. (http://www.bis.org/review/r110414f.pdf ) Return to text
3. Comments made at Trilateral Commission meeting. (http://www.iie.com/Fischer/pdf/Fischer115.pdf ) Return to text