Pisani-Ferry and Posen cite three episodes in the past which central bankers should look at carefully, namely the Great Depression, Japan’s lost decade and, more generally, previous experiences of post-financial crisis periods. We all certainly take a great deal of interest in, and inspiration from, these episodes. Looking at other postcrisis experiences, like that in Japan, some lessons can be learned.
In areas near national borders, small institutions, hitherto operating only locally or regionally, will be able to operate in markets that have not been accessible to them in the past, but at the same time they will likewise be affected by the keener competition.