The Lender of Last Resort in the European Single Financial Market

23 Pages Posted: 21 Jun 2006

See all articles by Garry J. Schinasi

Garry J. Schinasi

Independent Advisor, Global Financial Stability

Pedro Gustavo Teixeira

European Central Bank; Institute for Law and Finance

Date Written: May 2006

Abstract

This paper examines challenges in effectively implementing the lender-of-last-resort function in the EU single financial market. Briefly highlighted are features of the EU financial landscape that could increase EU systemic financial risk. Briefly described are the complexities of the EU's financial-stability architecture for preventing and resolving financial problems, including lender-of-last-resort operations. The paper examines how the lender-of-last-resort function might materialize during a systemic financial disturbance affecting more than one EU member state. The paper identifies challenges and possible ways of enhancing the effectiveness of the existing architecture.

Keywords: Lender of last resort, European single financial market, policy coordination

JEL Classification: E42, E58, F33, F36, F42, G15, G18, G28, H10, N20

Suggested Citation

Schinasi, Garry J. and Teixeira, Pedro Gustavo, The Lender of Last Resort in the European Single Financial Market (May 2006). IMF Working Paper No. 06/127, Available at SSRN: https://ssrn.com/abstract=910692

Garry J. Schinasi (Contact Author)

Independent Advisor, Global Financial Stability ( email )

20008
+1-202-361-0958 (Phone)

Pedro Gustavo Teixeira

European Central Bank ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Institute for Law and Finance ( email )

Gr├╝neburgplatz 1
Frankfurt am Main, DE 60323
Germany

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