But some of the great pivotal moments in the history of central banking are about shock tactics, the timing, their potential impact and the communications around them. These, I submit, are the three key lessons we need to keep in mind. Timing is everything When it comes to such surprises, timing can be everything – better not be late.
Take this from an issue of the New York Times during the 1907 crisis: “Knickerbocker will be aided; President Barney quits and financiers promise to support the Trust Company; JP Morgan & Co. help”. But JP Morgan didn’t help enough and the Knickerbocker Trust Company suspended payment for 5 months.