Prices, fast and slow

The job of the government in finance is not to influence the price but to create open access systems through which everyone can express views on the market

We often think that there is a problem when asset prices move sharply in a short time. There is a clamour for a government that will prevent these movements and “manage the volatility”. However, a slow, predictable price move is often destabilising. The one thing worse than a fast price move is the same move spread out through time.

Large price movements of financial assets worry many people. We would all like to live in a low volatility world, where nothing much changes from yesterday to today. People are even more suspicious about large price moves that happen within the