'Enemy of None But a Common Friend of All'? An International Perspective on the Lender-of-Last-Resort Function

58 Pages Posted: 10 Feb 2006

See all articles by Curzio Giannini

Curzio Giannini

Bank of Italy - International Relations

Date Written: January 1999

Abstract

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.

Keywords: Central Banks, Lending of Last Resort, International Monetary Fund

JEL Classification: E58, F33

Suggested Citation

Giannini, Curzio, 'Enemy of None But a Common Friend of All'? An International Perspective on the Lender-of-Last-Resort Function (January 1999). IMF Working Paper, Vol. , pp. 1-58, 1999. Available at SSRN: https://ssrn.com/abstract=880537

Curzio Giannini (Contact Author)

Bank of Italy - International Relations ( email )

Via Milano, 64
00184 Rome
Italy

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