The Lender of Last Resort Function after the Global Financial Crisis

By Marc C Dobler, Simon T Gray, Diarmuid Murphy, Bozena Radzewicz-Bak

January 22, 2016

Preview Citation

Format: Chicago

Marc C Dobler, Simon T Gray, Diarmuid Murphy, and Bozena Radzewicz-Bak. The Lender of Last Resort Function after the Global Financial Crisis, (USA: International Monetary Fund, 2016) 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 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.

Subject: Asset and liability management, Banking, Collateral, Currencies, Financial crises, Financial institutions, Financial regulation and supervision, Lender of last resort, Liquidity, Liquidity risk, Money

Keywords: Bilateral LOLR, CB balance sheet, CB funding, CB lending, CB liquidity support, CB LOLR, CB market support, Collateral, Currencies, Financial market, FX liquidity need, Global, Host CB, Lender of last resort, Liquidity, Liquidity risk, Liquidity support, LOLR operation, LOLR support, Put option, Risk control measures, WP

Publication Details

Pages:

63
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/010
Stock No:

WPIEA2016010
ISBN:

9781498355995
ISSN:

1018-5941

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