The Lender Of Last Resort Function After The Global Financial Crisis

Author : Marc Dobler,Mr.Simon Gray,Diarmuid Murphy,Bozena Radzewicz-Bak
Publisher : International Monetary Fund
Page : 63 pages
File Size : 53,7 Mb
Release : 2016-01-22
Category : Business & Economics
ISBN : 9781513567785

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The Lender of Last Resort Function after the Global Financial Crisis by Marc Dobler,Mr.Simon Gray,Diarmuid Murphy,Bozena Radzewicz-Bak Pdf

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.

Author : Mr.Haizhou Huang,Mr.C. A. E. Goodhart
Publisher : International Monetary Fund
Page : 34 pages
File Size : 50,9 Mb
Release : 1999-03-01
Category : Business & Economics
ISBN : 9781451845815

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A Model of the Lender of Last Resort by Mr.Haizhou Huang,Mr.C. A. E. Goodhart Pdf

This paper develops a model of the lender of last resort. It provides an analytical basis for “too big too fail” and a rationale for “constructive ambiguity”. Key results are that if contagion (moral hazard) is the main concern, the Central Bank (CB) will have an excessive (little) incentive to rescue banks and the resulting equilibrium risk level is high (low). When both contagion and moral hazard are jointly analyzed, the CB’s incentives to rescue are only slightly weaker than with contagion alone. The CB’s optimal policy may be non-monotonic in bank size.

Author : P. Arestis,R. Sobreira,José Luis Oreiro
Publisher : Springer
Page : 268 pages
File Size : 55,8 Mb
Release : 2010-11-24
Category : Business & Economics
ISBN : 9780230303942

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The Financial Crisis by P. Arestis,R. Sobreira,José Luis Oreiro Pdf

The 2008 financial crisis poses three fundamental questions for economists and policy makers; understanding the origins of the crisis, understanding the consequences of this crisis for the world economy, and finally understanding why the 2008 financial crisis is not as serious as the 1929 crisis. The prevailing view is that the 2008 financial crisis was solely the result of inadequate financial regulation together with a very loose monetary policy conducted by central banks, especially the Fed. It is believed that this crisis is a temporary detour in the normal course of the events, so that in the near future capitalist economies will resume the high growth path observed before the crisis. In terms of the third question, there is a widespread view that the fundamental reason that explains the avoidance of the harmful experiences of 1929 was the fiscal and monetary policy expansions in developed countries. No important role is assigned to developing countries in terms of the effects of the financial crisis. This book challenges the prevailing orthodoxy surrounding the origins and the consequences of the 2008 financial crisis. The book demonstrates that measures in addition to a profound change in the financial regulation are required if a new financial crisis is to be avoided in the future, measures include: a change in the conduct of economic policy; a reform of the national and international monetary systems; and a radical change in the pattern of income distribution. This book is essential reading for all interested in macroeconomics, monetary policy, development economics and the global impact of the financial crisis.

Author : Daniel McDowell
Publisher : Oxford University Press
Page : 256 pages
File Size : 45,9 Mb
Release : 2016-11-01
Category : Political Science
ISBN : 9780190605773

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Brother, Can You Spare a Billion? by Daniel McDowell Pdf

Conventional wisdom says that the International Monetary Fund (IMF) functions as the de facto international lender of last resort (ILLR) for the global financial system. However, that premise is incomplete. Brother, Can You Spare a Billion? explores how the U.S. has for decades regularly complemented the Fund's ILLR role by selectively providing billions of dollars in emergency loans to foreign economies in crisis. Why would the U.S. ever put national financial resources at risk to "bail out" foreign countries? McDowell argues that the U.S. has been compelled to provide such rescues unilaterally when it believes the IMF's multilateral response is too slow or too small to protect vital U.S. economic interests. Through a combination of historical case studies and statistical analysis, McDowell uncovers the defensive motives behind U.S. decisions to provide global liquidity from the 1960s through the 2008 global financial crisis. Moving beyond conventional wisdom, this book paints a complete picture of how international financial crises have been managed and highlights the unique role the U.S. has played in stabilizing the world economy in troubled times.

Author : Andrew Felton,Carmen M. Reinhart
Publisher : Centre for Economic Policy Research
Page : 212 pages
File Size : 49,8 Mb
Release : 2008
Category : Financial crises
ISBN : NWU:35556039221536

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The First Global Financial Crisis of the 21st Century by Andrew Felton,Carmen M. Reinhart Pdf

"Highlights how losses in the US subprime market had spread beyond the confines of the US mortgage sector and the borders of the United States, how risk spreads had ballooned and liquidity in some markets had dried up forcing large financial institutions to report significant losses. Bank runs were no longer the stuff of history." - Cover.

Author : Ben Bernanke
Publisher : Princeton University Press
Page : 144 pages
File Size : 55,5 Mb
Release : 2013-02-24
Category : Business & Economics
ISBN : 9780691158730

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The Federal Reserve and the Financial Crisis by Ben Bernanke Pdf

Collects a series of lectures the chairman of the U.S. Federal Reserve gave in 2012 about the Federal Reserve and the 2008 financial crisis.

Author : Anonim
Publisher : Routledge
Page : 527 pages
File Size : 52,6 Mb
Release : 2024-06-02
Category : Electronic
ISBN : 9781134358939

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The Lender of Last Resort by Anonim Pdf

Author : Forrest Capie,Geoffrey E. Wood
Publisher : Routledge
Page : 941 pages
File Size : 51,7 Mb
Release : 2006-12-15
Category : Business & Economics
ISBN : 9781134358922

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The Lender of Last Resort by Forrest Capie,Geoffrey E. Wood Pdf

The capacity of national central banks to 'step in' and bail out an economy is one which has proved to be vitally important over the years. This collection from Wood and Capie brings together important literature for the first time in book form.

Author : Jack Rasmus
Publisher : SCB Distributors
Page : 361 pages
File Size : 46,6 Mb
Release : 2017-08-17
Category : Business & Economics
ISBN : 9780997287035

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Central Bankers at the End of Their Rope? by Jack Rasmus Pdf

An historically unprecedented state subsidization of the US financial system has been implemented since 2010 via the Federal Reserve, the US central bank. Oiginally designed to serve as lender of last resort during banking crises, central banking globally has been transformed into the subsidization of the private banking system. Today that system is addicted to, and increasingly dependent on, continuing central bank infusions of significant amounts of liquidity. Rescinding this artificial subsidization would almost certainly lead to a financial and real collapse of the global economy. Central banks will not be able any time soon to retreat from their massive liquidity injections. Nor will they find it possible to raise their interest rates much beyond brief token adjustments. Truly, central bankers are at the end of their rope. This book provides a comprehensive analysis of this urgent dilemma and proposes how to revolutionize central banking in the public interest.

Author : Marianne Ojo
Publisher : Business Expert Press
Page : 165 pages
File Size : 47,7 Mb
Release : 2013-05-24
Category : Business & Economics
ISBN : 9781606497012

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Recovering from the Global Financial Crisis by Marianne Ojo Pdf

Why are some global financial crises more difficult to recover from and overcome than others? What steps are necessary in ensuring that financial stability and recovery is facilitated? And what kind of environment has the previous financial environment evolved to and what kind of financial products have contributed to greater vulnerability in the triggering of systemic risks? These are among some of the questions that this book addresses. In highlighting the role and importance of various actors in post-crises reforms as well as the huge impact of certain factors and products that are contributing in exacerbating the magnitude and speed of transmission of financial contagion, this book provides an insight into why global financial crises have become more complicated to address than was previously the case. Within this book, the author doesn’t merely identify and highlight the general root causes of global financial crises and the current issues, but gives each chapter recommendations and measures that contribute to the magnitude and severity of global financial crises.

Author : Anonim
Publisher : Unknown
Page : 140 pages
File Size : 50,5 Mb
Release : 2014
Category : Bank failures
ISBN : 9291317284

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Re-thinking the Lender of Last Resort by Anonim Pdf

"The lender of last resort (LOLR) is perhaps the most controversial role of a central bank. On the one hand, providing emergency liquidity assistance to financial institutions is a core central bank responsibility, given its unique ability to create liquid assets in the form of central bank reserves, its central position within the payment system, and its macroeconomic stabilisation objective. On the other hand, acting as LOLR is seen as very risky, potentially creating moral hazard on a massive scale, exposing the central bank to large financial risks, and blurring the boundary with fiscal policy. Moreover, liquidity assistance to individual institutions is typically deeply unpopular, creating reputation risks.

Author : Ms. Mitali Das,Ms. Gita Gopinath,Mr. Taehoon Kim,Jeremy C. Stein
Publisher : International Monetary Fund
Page : 61 pages
File Size : 50,6 Mb
Release : 2023-01-18
Category : Business & Economics
ISBN : 9798400231049

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Central Banks as Dollar Lenders of Last Resort: Implications for Regulation and Reserve Holdings by Ms. Mitali Das,Ms. Gita Gopinath,Mr. Taehoon Kim,Jeremy C. Stein Pdf

This paper explores how non-U.S. central banks behave when firms in their economies engage in currency mismatch, borrowing more heavily in dollars than justified by their operating exposures. We begin by documenting that, in a panel of 53 countries, central bank holdings of dollar reserves are significantly correlated with the dollar-denominated bank borrowing of their non-financial corporate sectors, controlling for a number of known covariates of reserve accumulation. We then build a model in which the central bank can deal with private-sector mismatch, and the associated risk of a domestic financial crisis, in two ways: (i) by imposing ex ante financial regulations such as bank capital requirements; or (ii) by building a stockpile of dollar reserves that allow it to serve as an ex post dollar lender of last resort. The model highlights a novel externality: individual central banks may tend to over-accumulate dollar reserves, relative to what a global planner would choose. This is because individual central banks do not internalize that their hoarding of reserves exacerbates a global scarcity of dollar-denominated safe assets, which lowers dollar interest rates and encourages firms to increase the currency mismatch of their liabilities. Relative to the decentralized outcome, a global planner may prefer stricter financial regulation (e.g., higher bank capital requirements) and reduced holdings of dollar reserves.

Author : Douglas W. Arner,Emilios Avgouleas,Danny Busch,Steven L. Schwarcz
Publisher : McGill-Queen's Press - MQUP
Page : 301 pages
File Size : 45,6 Mb
Release : 2019-10-02
Category : Political Science
ISBN : 9781928096917

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Systemic Risk in the Financial Sector by Douglas W. Arner,Emilios Avgouleas,Danny Busch,Steven L. Schwarcz Pdf

In late 2008, the world's financial system was teetering on the brink of systemic collapse. While the impacts of the global financial crisis would be felt immediately, at every level of the economy, it would also send years-long aftershocks through investment, banking and regulatory circles worldwide. More than a decade after the worst year of the global financial crisis, what has been learned from its harsh lessons? Are governments and regulators more prepared for another financial system failure that would significantly affect the real economy? What may be the potential triggers for such a collapse to occur in the future? Systemic Risk in the Financial Sector: Ten Years after the Great Crash draws on some of the world's leading experts on financial stability and regulation to examine and critique the progress made since 2008 in addressing systemic risk. The book covers topics such as central banks and macroprudential policies; fintech; regulators' perspectives from the United States and the European Union; the logistical and incentive challenges that impede standardization and collection; clearing houses and systemic risk; optimal resolution and bail-in tools; and bank leverage, welfare and regulation. Drawing on experts across disciplines — including Howell Jackson, John Geanakoplos, Charles Goodhart, Anat Admati, Roberta Romano and Martin Hellwig — Systemic Risk in the Financial Sector is the definitive guide to understanding the global financial crisis, the safeguards being put into place to try to avoid similar crises in the future, and the limitations of those safeguards.

Author : Neil Shenai
Publisher : Springer
Page : 231 pages
File Size : 54,7 Mb
Release : 2018-09-19
Category : Business & Economics
ISBN : 9783319913469

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Social Finance by Neil Shenai Pdf

How do market participants construct stable markets? Why do crises that seem inevitable after-the-fact routinely take market participants by surprise? What forces trigger financial panics, and why does uncertainty lead to market volatility? How do economic elites respond to financial distress, and why are some regulatory interventions more effective than others? Social Finance: Shadow Banking during the Global Financial Crisis answers these questions by presenting a new, economic conventions-based model of financial crises. This model emerges from a theoretical synthesis of several intellectual traditions, including Keynesian epistemology, Hyman Minsky’s asset market theory, economic sociology, and international relations theory. Social Finance uses this new paradigm to explain instability in the global shadow banking system during the global financial crisis. And it presents the results of interviews with some of the world’s leading investors – who saw over $2 trillion in annual order flows and managed over $160 billion in assets – to provide first-hand accounts of markets in crisis. Written in accessible prose, Social Finance will appeal to a broad audience of academics, policymakers, and practitioners interested in understanding the drivers of financial stability in the twenty-first century.

Author : Victor A. Beker
Publisher : Routledge
Page : 280 pages
File Size : 52,6 Mb
Release : 2021-04-21
Category : Business & Economics
ISBN : 9781000375299

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Preventing the Next Financial Crisis by Victor A. Beker Pdf

The collapse of Lehman Brothers, the oldest and fourth-largest US investment bank, in September 2008 precipitated the global financial crisis. This deepened the contraction in economic activity that had already started in December 2007 and has become known as the Great Recession. Following a sluggish and uneven period of recovery, levels of private debt have recently been on the rise again making another financial crisis almost inevitable. This book answers the key question: can anything be done to prevent a new financial crisis or minimize its impact? The book opens with an analysis of the main elements responsible for the 2007/2009 financial crisis and assesses the extent to which they are still present in today ́s financial system. The responses to the financial crises - particularly the Dodd-Frank Act, the establishment of the Financial Stability Board, and attempts to regulate shadow banking – are evaluated for their effectiveness. It is found that there is a high risk of a new bubble developing, there remains a lack of transparency in the financial industry, and risk-taking continues to be incentivised among bankers and investors. Proposals are put forward to ameliorate the risks, arguing for the need for an international lender of last resort, recalling Keynes’ idea for an International Clearing Union. This book will be of significant interest to scholars and students of financial crises, financial stability, and alternative approaches to finance and economics.