Charles Plosser, president and CEO of the Federal Reserve Bank of Philadelphia, has called upon federal economic policymakers to promptly devise an "exit strategy" that will allow the Federal Reserve to untether itself from the extraordinary monetary and lending actions it has recently taken to prop up the faltering economy. The criteria under which the federal government would intervene in markets or extend credit, including defining what constitutes the "unusual and exigent" circumstances that form the legal basis for the Fed's non-traditional lending, will be essential if policymakers are to mitigate the moral hazard they have created, Plosser said.
Fed official seeks monetary policy 'exit strategy' Anonymous Mortgage Banking; Mar 2009; 69, 6; Docstoc pg. 12 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
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