But why have central banks so far shied away from using forward guidance in this manner? One important reason may be the problem of time inconsistency. [11] Let’s say that a father wants to make sure his son studies up on his Latin vocabulary. It makes sense, then, to announce that he will quiz his son next Thursday evening.
It is worthwhile examining a persistent characteristic during these years, indicative of these considerations: shares of European banks have been trading at a discount to tangible book value, while those of the largest US banks trade at a premium to book value.