Possibly Johnson was thinking of the central bank having to operate via openmarket operations, through exchanges of assets, which would induce substitution effects, rather than through the printing of money, which in the first instance produced increases in real balances, which would produce wealth effects, but which are typically fiscal rather than monetary actions. 6. Involuntary unemployment.
I would like to highlight three important regulatory paradigm shifts that follow from this renewed focus on macroprudential regulation. Taking Stock of the Entire Banking Sector First, in line with the pivot away from microprudential regulation, we have a renewed focus not only on the health of individual financial firms but on the amount of capital in the entire banking sector.