But governments should refrain from issuing longevity bonds. Not only do governments lack a suitable hedge for longevity risks, but – due to national pay-as-you-go schemes – they already face a huge demographic burden which should not be exacerbated needlessly.
During the recent financial turmoil, the ability of the Fed to obtain information directly from key institutions and from supervisory reviews has been invaluable for understanding financial developments and their implications for the economy.