2  BIS Review 51/2008  In 1931, Fisher – alarmed by the contraction in money growth – called on Meyer and pointed out that demand deposits were declining sharply, signalling that monetary policy was inadequate to address the severe economic contraction.
Apparently, Chairman Meyer’s reply was to enquire what demand deposits were, but, even after listening to Fisher’s explanation, failed to show much interest. Some of the members of the audience may be thinking that the choice of an anecdote reminding us that central bankers ignore monetary developments at their own risk is not too surprising in this house.