Enemy of None But a Common Friend of All? An International Perspectiveon the Lender-Of-Last-Resort Function

January 1, 1999

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Curzio Giannini. Enemy of None But a Common Friend of All? An International Perspectiveon the Lender-Of-Last-Resort Function, (USA: International Monetary Fund, 1999) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper explores whether and how national lender-of-last-resort practices can be adapted internationally. Nationally, the effectiveness of such practices is based on a blend of resource availability, technical discretion as to the conditions attached, ex ante supervision, and powers of enforcement. Some features of the international environment, however, make it difficult to replicate this structure, which may explain why recent large-scale rescue packages have worked less than satisfactorily. Private contingent credit facilities and IMF lending into arrears in the context of internationally approved, temporary moratoria on foreign debt may nonetheless offer some scope for effective, although limited in aims and resources, international liquidity support, but this would require amending the IMF’s Articles of Agreement.

Subject: Asset and liability management, Banking, Crisis management, Financial crises, Financial sector policy and analysis, Lender of last resort, Liquidity, Moral hazard

Keywords: A number of country, Asia and Pacific, Banking system, Capital account, Carry trade, Central Banks, Crisis management, Deposit-insurance package, East Asia, Europe, Exchange contract, Exchange rate, Foreign exchange, Global, Government intervention, Government of a country, Governor authority, IMF article, International community, International Monetary Fund, Lender of last resort, Lender-of-last-resort function, Lending of Last Resort, Liquidity, Monetary policy, Moral hazard, Public funds, Standpoint ambiguity, WP

Publication Details

Pages:

58
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1999/010
Stock No:

WPIEA0101999
ISBN:

9781451842678
ISSN:

1018-5941

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