I would then like to highlight a few of the broad regulatory issues that we are likely to confront over the years ahead. The increased cost of financial intermediation First, the higher cost of financial intermediation. Prior to the financial crisis, credit spreads were low, leverage was easily available, financial institutions had become highly interconnected and large maturity mismatches were common.
Such actions may demonstrate a resolve by the central bank to keep short-term interest rates at zero for a prolonged period of time, with the intention of raising inflation expectations and lowering real interest rates.