The Lender of Last Resort: A 21st Century Approach
نویسندگان
چکیده
منابع مشابه
THE LENDER OF LAST RESORT: A 21st CENTURY APPROACH
The classical Bagehot’s conception of a Lender of Last Resort (LOLR) that lends to illiquid banks has been criticized on two grounds: on the one hand, the distinction between insolvency and illiquidity is not clear cut; on the other a fully collateralized repo market allows Central Banks to provide the adequate aggregated amount of liquidity and leave the responsibility of lending uncollaterali...
متن کاملLender of Last Resort :
It has become commonplace in the current crisis to refer to the Federal Reserve as the economy’s lender of last resort (LLR). Typical is the observation of Glenn Hubbard, Hal Scott, and John Thornton (2009) that “Over many decades and especially in this financial crisis, the Fed has used its balance sheet to be a classical lender of last resort.” With all due respect to these authors and numero...
متن کاملThe Case for a Lender-of-Last-Resort Role for the IMF
The concept of a lender of last resort (LLR) stems from a central banking principle dating back to Bagehot more than a century ago. The principle holds that in a financial panic, the central bank should stand ready "to lend freely...whenever the security is good" (Bagehot 1873, 48, 51). This precept implies that in a financial crisis there is a multipleequilibrium situation, and that the good o...
متن کاملBanking crises and the lender of last resort: How crucial is the role of information?
This article develops a model of bank runs and crises and analyses how the presence of a lender of last resort (LOLR) affects the solvency of the banking system. We obtain a one to one mapping from the depositors’ equilibrium strategy to an optimal contract prevailing in the economy. The study finds that the difference between a perfectly informed and an imperfectly informed LOLR can be crucial...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2004
ISSN: 1556-5068
DOI: 10.2139/ssrn.556201