I reasoned that movements in the exchange rate absorb shocks that otherwise would have gone to inflation or output and applauded the role the flexible exchange rate played in sheltering our economy from the impacts of the crisis.
This dramatic shift in concerns about a financial institution's funding base results in much more focus on the stability of funding sources – one of the reasons that the bank charter has become so attractive. Indeed, we are seeing the emphasis on funding driving many other factors that affect financial institutions, including the viability of various aspects of firms' business models.