These were designed to rebuild financial institutions and markets in a way that would minimize the chances of future crises and make the system better able to withstand any that might occur. The third point focused on ambitious structural reforms to liberalize labour and product markets and improve governance and institutional arrangements, thereby raising long-term efficiency and potential output.
The preference for safety is partly responsible for the excess demand for safe assets, for the increase of the equity risk premium, for the reluctance to invest in real productive assets and for the persistent sluggishness of wages. The elasticities of wage response to the economic slack and of consumption and investment reaction to the cost of finance have both declined.