Some of the issues I will raise today – such as population aging and associated macroeconomic and structural issues – are traditionally regarded as long-term issues for central banks, and they thus tend to be treated as issues beyond the framework of monetary policy.
Surely the more capital a bank has the safer it is and the more it can lend. Why don’t banks hold as much capital as they can? First, there is cost associated with holding capital, being what the capital could earn if it was invested elsewhere.