The assumption held by many around 12 months ago that structured securities backed by mortgages provided a premium over government bonds at a similar (low) level of risk has since proven to be a gross misperception. The effects of the US subprime crisis meant, that for a period, a general crisis of confidence spread among financial market participants.
As a result, this is an objective which resonates with the companies and households whose collective decisions will result in the outcome of whatever policy is chosen. Practical policy requires us to start with this objective, and to find the economic policies that may be employed to achieve it. What might these policies be?