BIS central bankers’ speeches  3  Whatever decisions are taken in the coming months, no one should be tempted to declare “mission accomplished.” In order to maintain systemic resilience, the monitoring, supervision and regulation of shadow banking will need to be dynamic.2 The recent loss incurred by UBS on its Delta One trading desk demonstrates the need for vigilant risk management of complex new products.
Keynesian theory was taught and applied, but Modigliani also encouraged me to look into the work of Friedman, who was refocusing attention on classical monetary theory. Friedman had restated the quantity theory of money in 1956. In his Presidential address to the American Economic Association in December 1967 he prefigured the explanation of the stagflation of the 1970s.