Discuss on how during a period of financial crisis when funds cannot be raised easily or quickly, the fundamental values of some assets can depart from market prices. Explain how this relates to the distinction between loans and securities. Identify consequences that can be transmitted to the real economy.
Comment on government policy initiatives, either specifically or in relation to their general function in the context described. Do you agree with this author on the beneficial effects of policy interventions during the period of financial crisis discussed?