4  Runs on the repurchase agreement (repo) funding of asset-backed securities were also troublesome for both banks and nonbanks. See Gary Gorton and Andrew Metrick (2012), “Securitized Banking and the Run on Repo,” Journal of Financial Economics, vol. 104 (June), pp. 425–51.
These developments require shifts in activity among sectors and create a need for adjustments by many businesses. Monetary policy is facilitating these adjustments by supporting aggregate demand, with the goal of keeping the economy near its full production potential and inflation on target.