The Lender of Last Resort Function after the Global Financial Crisis

Marc Dobler, Simon Gray, Diarmuid Murphy and Bozena Radzewicz-Bak

No 2016/010, IMF Working Papers from International Monetary Fund

Abstract: The global financial crisis (GFC) has renewed interest in emergency liquidity support (sometimes referred to as “Lender of Last Resort”) provided by central banks to financial institutions and challenged the traditional way of conducting these operations. Despite a vast literature on the topic, central bank approaches and practices vary considerably. In this paper we focus on, for the most part, the provision of idiosyncratic support, approaching it from an operational perspective; highlighting different approaches adopted by central banks; and also identifying some of the issues that arose during the GFC.

Keywords: WP; financial market; LOLR support; liquidity support; CB lending; LOLR operation; put option; lender of last resort; collateral; risk control measures; bilateral LOLR; CB liquidity support; CB LOLR; CB market support; CB balance sheet; host CB; CB funding; FX liquidity need; Liquidity; Liquidity risk; Currencies; Global (search for similar items in EconPapers)
Pages: 63
Date: 2016-01-22
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Citations: View citations in EconPapers (7)

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