The Lender of Last Resort in the European Single Financial Market
23 Pages Posted: 21 Jun 2006
Date Written: May 2006
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: Suggested Citation