Nonetheless, the depositor appears to have no great difficulty – should he or she want insured deposits – in finding multiple sources of fully insured accounts. In addition, the singular characteristic of postwar household financial asset holdings has been the increasing diversity of portfolio choices.
There is no doubt that should a downgrade transpire, it will be reflected in the exchange rate (to the extent that it is not already reflected). This will not be a sign of increased competitiveness, rather an adjustment to a deterioration in our competitive standing globally as an investment destination. The impact of strong institutions on our global competitiveness cannot be underestimated.