Central Bank Lending in a Liquidity Crisis

Filippo Occhino

Economic Commentary, 2016, issue April

Abstract: Solvent banks may appear insolvent in the midst of a liquidity crisis, due to the plunge of their assets? value below their normal value. The responsibility of the central bank is to provide liquidity to the banks that would be solvent under normal economic conditions, at lending terms consistent with normal market conditions.

Keywords: Central Banks; Crisis; Liquidity (search for similar items in EconPapers)
Date: 2016
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