If the funding fears are based on self-feeding panic, monetary authorities can calm the waters.
DUBLIN — Ireland's Finance Ministry and the International Monetary Fund sought to calm markets Friday after a newspaper report on the possibility of a bailout of the country sent investors running for cover.
As China's government uses monetary policy to try to calm markets, micro-level reforms must continue.
The government has sent a mission to Washington, led by Amaury Bier, left, for talks with the International Monetary Fund in an effort to calm market fears.
Indeed, with financial bubbles growing, the nature of financial risk morphing, inequality worsening, and non-traditional – and in some cases extreme – political forces continuing to gain traction, the calming influence of unconventional monetary policies is being stretched to its limits.
"An uneasy calm remains," said Olivier Blanchard, the International Monetary Fund's chief economist.
Carsten Brzeski of ING reckons the ECB president will urge the markets to stay calm, and pledge not to tighten monetary policy anytime soon: In our view, the ECB remains in crisis mode.
The sudden announcement of the standby credit line for Brazil was not the only move the monetary fund made on Friday in an effort to calm markets.
"Calm has reigned over financial markets, but it has been an uneasy calm," said Claudio Borio, the head of the BIS monetary and economic department.
