A slightest problem with these banks and the entire financial system could come unstuck – this is what precisely happened during the crisis. 17. The next section deals with the numerous implicit support systems provided by banks for a well-functioning capital market. Capital markets’ linkage with banks 18.
However, the FOMC can attempt to minimize bond-market stress in at least two ways: first, through transparency, that is, by providing as much information as possible about the economic outlook and the factors that the FOMC is likely to take into account in its decisions; and second, by adopting regular and easily understood policy strategies.