The FOMC perhaps could have waited for more clarity and left policy unchanged last week, but I believe that the potential costs of inaction outweighed the benefits, especially because, should the easing eventually appear to have been unnecessary, it could be removed. In voting to ease policy, I carefully considered the effect of that decision on our other objective – price stability.
Problems emanating from the banking sector can cause wide spread destabilization to the segments to which it is, directly or indirectly linked. 5. As the banks perform this role of intermediation in fiduciary capacity, ensuring a balance between the risks and returns assumes significance and the effort towards achieving this balance can be referred to as risk management.