The Fed Rates that Resuscitated Wall Street
Economics One-Pager Archive from Levy Economics Institute
Nicola Matthews, University of Missouri-Kansas City, presents the main findings of her research on the Fed's lending practices following the global financial crisis of 2008. Applying Walter Bagehot's principles, she finds that the Fed departed from the traditional lender-of-last-resort function of a central bank by lending to insolvent banks without good collateral--and below penalty rates. Most of the Fed's emergency facilities lent at rates that were, on average, at or below market rates, with the big banks the primary beneficiaries. The Fed went beyond aiding markets to effectively making markets. Reform, Matthews concludes, is the only solution.
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:lev:levyop:op_40
Access Statistics for this paper
More papers in Economics One-Pager Archive from Levy Economics Institute
Series data maintained by Elizabeth Dunn ().