Should there be a financial crisis, it pays insurance benefits to the bank from the lock box. The bank can use those funds to increase its capital. If the policy term elapses without a financial crisis, the liability reserves in the lock box return to the investor. This is the basic idea behind capital insurance. What sorts of banks are envisioned as the insured?
* * * The term “secular stagnation” was coined by Alvin Hansen before World War II.1 Among the driving factors of the slowdown he predicted were limited population growth and lack of innovation. A decade or so later, we had the baby boom and one of the strongest economic expansion the world has ever experienced – in French, “Les Trente Glorieuses” started.