Karolyi says actions of the world's central banks was "smart and strategic"
The Johnson professor of finance responds to news that the worlds central banks have moved together to ease fears of another global credit crisis
In response to the Nov. 30 report that the world's central banks made a move to lower the cost of borrowing - a move that emboldened investors, eased fears of a global credit crisis and sent Wall Street soaring more than 400 points - Johnson's Andrew Karolyi
, professor of finance and co-academic director for the Emerging Markets Institute
(EMI) said, "It is a smart, strategic move. They need to show strength of force to the markets to alleviate anxiety. Together, the balance sheets of the central banks are stronger than any one individual central bank."
Bloomberg Business Week (Move by Central Banks Exhilarates Wall Street, Nov. 30)
reported that "Wednesday's [Nov. 30] action by the banks of Europe, the U.S., Britain, Canada, Japan and Switzerland represented an extraordinary coordinated effort. But amid the market's excitement, many doubts loomed. Some analysts cautioned that the banks' move did nothing to provide a permanent fix to the problems facing heavily indebted European nations such as Italy and Greece. It only buys time for political leaders." MORE