Lemon Market and Policies to Control Them

http://www.ft.com/cms/s/0/d3db8c86-5564-11dc-b971-0000779fd2ac.html?nclick_check=1

In the above article, Martin Wolf discussed the role of the Federal Reserve in helping the economy and Wall Street. He discusses what he saw as a "market for lemons in the financial system that was being driven by "asymmetric information"...surrounded by many of the structured products". Ultimately, what happened was that buyers felt that sellers knew more about the quality of the securities than the sellers did....thus freezing the market. In response to this, Wolf says that the solution to these problems is to do nothing. Banks should no promote markets for lemons but should continue to provide liquidity and change interest rates to stabilize things. If this is successful, sellers are forced into reducing the asymmetric information in the marketplace. The article goes into more detail about this. The last question I'd pose is....given the date of the article, has Wolf's theory worked?