ISAAH MHLANGA: Be wary of calls for quick and easy solutions that invite crisis
The collapse of SVB should be a lesson on how not to act when good times turn bad
Prudent monetary policy is key for the proper functioning of the economy. This has long been known, but there is newer proof from the events that led to the sudden collapse of Silicon Valley Bank (SVB) in the US.
While the focus now is on the potential for a wider banking crisis and central banks’ reaction in the midst of sticky, out-of-target inflation, the broader lesson for SA is to always be wary of those who advocate for the Reserve Bank to be turned into a money printing machine to solve problems that aren’t caused by the amount of currency in circulation. ..
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