The Lender of Last Resort Function after the Global Financial Crisis

64 Pages Posted: 28 Mar 2016

See all articles by Marc Dobler

Marc Dobler

Bank of England

Simon Gray

International Monetary Fund (IMF)

Diarmuid Murphy

International Monetary Fund (IMF)

Bozena Radzewicz-Bak

International Monetary Fund (IMF)

Date Written: January 2016

Abstract

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.

Keywords: collateral, risk control measures, market, lender, liquidity, central bank, Government Policy and Regulation, All Countries,

JEL Classification: E58, G21, G28

Suggested Citation

Dobler, Marc and Gray, Simon and Murphy, Diarmuid and Radzewicz-Bak, Bozena, The Lender of Last Resort Function after the Global Financial Crisis (January 2016). IMF Working Paper No. 16/10. Available at SSRN: https://ssrn.com/abstract=2754915

Marc Dobler (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Simon Gray

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Diarmuid Murphy

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Bozena Radzewicz-Bak

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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