lemontree

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  1. THey know a crash is inevitable, so the extra capital will make it eaiser for the central bank to react quickly. As DB said before, this time governments may not act as quickly as in the 2007 financial crisis. It is possible to see that in the UK, rate goes up a bit and the central bank lending up as well. The money policy role becomes neutral which could minimise the negative impact on asset maket such as housing and stock.