Can Emerging Economy Central Banks Be Market-Makers of Last Resort?

3 Pages Posted: 8 Oct 2014

See all articles by Michael P. Dooley

Michael P. Dooley

University of California at Santa Cruz; National Bureau of Economic Research (NBER)

Date Written: September 2014

Abstract

Market-maker of last resort (MMLR) is not an extension of the lender of last resort (LOLR) function; it is a completely new role for the central bank. The implicit model behind the classical LOLR function is that credit markets are driven by trust in solvency of banks and non-bank intermediaries. When that trust evaporates, the central bank can step in and save the day. In some long-departed monetary system, this may have been the whole story.

Full publication: Re-Thinking the Lender of Last Resort

Suggested Citation

Dooley, Michael P., Can Emerging Economy Central Banks Be Market-Makers of Last Resort? (September 2014). BIS Paper No. 79k, Available at SSRN: https://ssrn.com/abstract=2504752

Michael P. Dooley (Contact Author)

University of California at Santa Cruz ( email )

Santa Cruz, CA 95064
United States
510-459-3662 (Phone)
510-459-5900 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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