Quoted in Fischer (1986, p. 3). 6  Friedman (1977). 7  Fischer and Modigliani (1978). 8  Volcker (1979a). 9  Volcker (1979b). BIS Review 13/2006  5  had the harder sell: As an economist would say, we might expect diminishing marginal returns to inflation reduction. Yet I think subsequent events demonstrate clear benefits from the tenacity of the Fed under Greenspan.
The complex approach ‒ in other words, Basel II ‒ was tested in the crisis. The crisis and the rather poor performance of internal market risk models as a basis for calculating regulatory capital requirements have made sole reliance on such an approach impossible.