Harold’s career as a central banker and my own were intertwined, spanning over 35 years. For much of that time our careers moved in parallel until finally, he received the reward of retirement. My reward is coming.
However the increasing credit and liquidity premiums imply that this type of substitution is no longer valid. Market conditions In general banks are under pressure. They experience rising funding costs and declining market value (see slide 15). The capacity of the balance sheet is constrained making it more difficult to handle the intermediation phase between issuers and end-investors.