In principle, the scope for direct lending by the central bank to the real economy should depend on the extent that the malfunctioning of the money and credit markets distorts bank lending and prevents aggregate households and businesses from obtaining credit.
Third, even with a right and pertinent diagnosis, and appropriate significant improvements in benchmark voluntary principles and codes of conduct for the private sector, as well as substantial progress in rules and regulations and in cooperation and coordination between authorities where needed, my understanding is that we could not be sure that the “unavoidable and necessary market corrections” of the future would be reasonably “smooth and orderly”.