In particular, the largest banks have found single-name credit default swaps a highly attractive mechanism for reducing exposure concentrations in their loan books while allowing them to meet the needs of their largest corporate customers. But some observers argue that what is good for the banking system may not be good for the financial system as a whole.
There are legitimate concerns associated with the costs and benefits of continuing asset purchases. We may face challenges related to financial stability, as well as market function and inflation expectations. I do not personally see fiscal dominance as high on the list of near term risks. I thank the authors for their interesting work.