Risk averse and Tightening: Difference between pages

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imported>Doug Williamson
(Create the page. Source: ACT Risk Management, Reading 1.1.1 p4 The Concept of Risk, 1 April 2011.)
 
imported>Doug Williamson
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To be risk averse means to prefer a lower level of risk, for any given level of return or cost.
''Monetary policy - money supply.''


Therefore, for example, risk averse investors will always require a higher expected rate of return to compensate for any higher levels of risk which they accept.
Measures designed to reduce the money supply.


Usually with the intention of reducing excessive inflation.


The assumption that market participants are rational and risk averse is one of the underpinnings of the efficient markets hypothesis.


:<span style="color:#4B0082">'''''Ample tools to tighten'''''</span>
:"At present, if we overdo the stimulus somewhat and then find the economy recovers strongly, we have ample tools and time to tighten policy again before persistent excess demand and inflation become a problem."
:''Michael Saunders, External Member of the Bank of England's Monetary Policy Committee (MPC), May 2020.''




== See also ==
== See also ==
*[[Risk]]
* [[Asymmetric]]
*[[Risk appetite]]
* [[Balance sheet reduction policy]]
*[[Efficient markets hypothesis]]
* [[Bank of England]]
* [[Central bank]]
* [[COVID-19]]
* [[Downside risk]]
* [[Easing]]
* [[Inflation]]
* [[Inflation target]]
* [[Lowflation]]
* [[Monetary policy]]
* [[Monetary Policy Committee]]
* [[Money supply]]
* [[Overheating]]
* [[Quantitative easing]]
* [[Quantitative tightening]]
* [[Recession]]
* [[Risk management]]
* [[Stagflation]]


[[Category:Corporate_Strategy]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Managing_Risk]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Revision as of 22:59, 12 June 2020

Monetary policy - money supply.

Measures designed to reduce the money supply.

Usually with the intention of reducing excessive inflation.


Ample tools to tighten
"At present, if we overdo the stimulus somewhat and then find the economy recovers strongly, we have ample tools and time to tighten policy again before persistent excess demand and inflation become a problem."
Michael Saunders, External Member of the Bank of England's Monetary Policy Committee (MPC), May 2020.


See also