# Cleaning up after (also usually used in German), sometimes mischievously called sweeping the shards

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- Post ID: 589381
- Modified: 2023-07-25T20:59:15+00:00
- Language: en

## Definition

In the context of a speculative bubble, the central bank's efforts to limit damage after a bubble has burst, for example by providing generous liquidity. - However, it cannot be the central bank's task to prevent bubbles. With the instruments at its disposal, a central bank can hardly achieve monetary stability and financial stability at the same time. It is rather up to the supervisory authorities to take appropriate measures to curb a run-up in asset markets, for instance by imposing high - and, depending on various criteria, variable, and, if there are signs of a bubble, sharply increasing - collateral requirements for credit-financed transactions. - When it comes to euphoric expectations of profit and wealth, the small investors who are primarily pumping up a bubble cannot be stopped by anything or anyone: financial history has many examples to prove this. There will probably be bubbles again and again in the future. - See bubble, speculative, dotcom bubble, real estate bubble, Jackson Hole consensus, leaning against the wind, Martin principle, milkmaid bull market, quantitative easing, tulip crash, exuberance, unreasonable, full allocation. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

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