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Measures of Investor and Consumer Confidence and Policy Actions in the Current Crisis / Dailami, Mansoor
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Dailami, Mansoor
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Access to Finance.
- Banks and Banking Reform.
- Central banks.
- Currencies and Exchange Rates.
- Debt Markets.
- Developing countries.
- Economic Theory and Research.
- Emerging Markets.
- Federal reserve.
- Finance and Financial Sector Development.
- Financial crisis.
- Financial Intermediation.
- Financial market.
- Financial markets.
- Financial system.
- Global economy.
- Government policy.
- Interest rates.
- International bank.
- International finance.
- Investor confidence.
- Liquidity.
- Loss of confidence.
- Macroeconomic conditions.
- Macroeconomics and Economic Growth.
- Market prices.
- Markets and Market Access.
- Policy responses.
- Private Sector Development.
- Securities.
- Stock market.
- Local Subjects:
- Access to Finance.
- Banks and Banking Reform.
- Central banks.
- Currencies and Exchange Rates.
- Debt Markets.
- Developing countries.
- Economic Theory and Research.
- Emerging Markets.
- Federal reserve.
- Finance and Financial Sector Development.
- Financial crisis.
- Financial Intermediation.
- Financial market.
- Financial markets.
- Financial system.
- Global economy.
- Government policy.
- Interest rates.
- International bank.
- International finance.
- Investor confidence.
- Liquidity.
- Loss of confidence.
- Macroeconomic conditions.
- Macroeconomics and Economic Growth.
- Market prices.
- Markets and Market Access.
- Policy responses.
- Private Sector Development.
- Securities.
- Stock market.
- Physical Description:
- 1 online resource (28 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2009
- System Details:
- data file
- Summary:
- The current financial crisis has highlighted the danger that declines in confidence can have a self-fulfilling effect on economic activity. In this paper, the authors consider ways of measuring investor and consumer confidence, and try to explain the evolution of confidence using measures of financial volatility, investment performance, macroeconomic outcomes, and policy actions. They identify a link between investor and consumer confidence. Finally, they show that liquidity provision and easing of interest rates had only a limited effect on financial market spreads during the crisis, arguing for additional measures to address the loss of confidence. The paper focuses on the need for financial regulatory reform, and shows how the incentives to cooperate in this area are stimulated by a common shock to confidence.
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