In particular, the Federal Reserve and many other central banks appear to have succeeded in anchoring long-run inflation expectations – an achievement that has contributed to macroeconomic stability and eased the task of monetary policy. However, bad luck or other factors could cause expectations to begin to drift again. If so, the Federal Reserve will need to respond appropriately.
As the authorities increasingly became mindful of the risks of a widespread crisis developing, Northern Rock was granted emergency liquidity assistance by the Bank of England and eventually nationalised by the British government. Internationally, regulators were given much food for thought by the turbulence in the financial markets.