The big Australian banks anticipated the central bank's move, and have been increasing their fixed lending rates throughout the year.
A few years ago, San Francisco's food bank anticipated this crunch and began to look farther afield for sources of food.
"Prices have turned out weaker than the B.O.J. expected and the economy is slowing more than the bank anticipated, with both exports and domestic demand weakening," said Yoshimasa Maruyama, chief economist at Itochu Economic Research Institute in Tokyo.
Mr. Strader said the bank "anticipates" that it will respond to Mr. Marshall's letter.
Furthermore, consumer credit is becoming scarcer as banks anticipate a rise in bad loans.
The banks anticipate this behaviour and run even more risks as a result.Two other incentive distortions reinforce this bias towards bail-outs.
The head of corporate banking at one large German bank anticipates an average downgrade of three notches among its clients, which in theory could force the bank to increase its capital reserves by as much as a quarter.
In a prescient paper published in 1996 with Jean-Charles Rochet, he noted that the interconnectedness of modern financial systems would make it impossible for governments to allow big banks to fail, and that banks, anticipating bail-outs, would behave recklessly.
The new Fed forecast, a compilation of the individual projections by Fed governors and the presidents of the regional Fed banks, anticipates that inflation will slow down in response to slower economic growth and that consumer prices will rise, from 2.1percentto2.4percentcenthis yearar.
Housing bubbles — like the one precipitating the current mess — are all too consistent with full rationality on an individual level: if a bank anticipates that a borrower will refinance his mortgage loan should the price of his house rise, it may lend him money even though it knows he can't pay it back.
