Furthermore, the central banker’s main tool for controlling speculation is raising interest rates. As long as speculators continue to anticipate large profits from capital gains they are not deterred by high interest rates. And, as Keynes observed in the 1930s, raising interest rates to control speculation at the end of the business cycle damages the whole economy. The only other tool left to central bankers is to issue warnings to speculators to desist from their activities – what was called “moral suasion” in the 1920s. Time and time again, such warnings have been made by authorities and on no occasion have speculators heeded a word.

According to the text:

Item 1 - Moral suasion could be more effective if the authorities pay heed to Keynes’ advice.