- The collapse of Silicon Valley Bank was the latest iteration of a classic bank run.
- Central banks stepping in to backstop the financial system is a time-honoured solution.
- The Fed's assistance has been far more lavish than in previous rescues, accepting government bonds at face value.
- The Fed risks morphing from a lender of last resort to a loss-maker of first resort.
- The Fed's pursuit of stability raises questions about whether it harms the economy in the long run.
The Fed smothers capitalism in an attempt to save it
The Fed's latest financial intervention accepts government bonds at face value, raising questions about its impact on the economy. Is the Fed's pursuit of stability harming the economy?