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Confusion about the lender of last resort

Bindseil, Ulrich, Laeven, Luc, (2017), “Confusion about the lender of last resort”, Voxeu, 13 Ιανουαρίου 2017

The scale and scope of central bank lender of last resort operations during the Global Crisis raised concerns that central banks may be taking excessive risks and supporting moral hazard. This column argues that criticism of such operations is misguided. In the crisis, central banks did not make financial losses when acting as lender of last resort, which shows that they have applied their frameworks with prudence.

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