Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
How Central Banks Use Moral Suasion
Episode 22 of Monetary Policy Explained with Fexingo. Lucas and Luna drill into one of central banking's oldest and least-understood tools: moral suasion. Not jawboning or press conferences — the quiet, off-the-record phone calls where a central bank governor asks a bank CEO to pull back on lending or hold off on a dividend. Lucas traces the tactic back to the Bank of England's 'governor's eyebrow' in the 1960s, then walks through a modern case: the Bank of Japan's 2024 direct appeals to regional banks to stop hoarding government bonds. Luna pushes on whether it…
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