Bindseil, Ulrich, Laeven, Luc, (2017), “Confusion about the lender of last resort”, Voxeu, 13 January 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.
Relevant Posts
- Shen, Dennis, (2016), “Central banks are facing a crisis of confidence – it’s time to reinvent global monetary policy”, LSE Europpblog, 6 October
- Barwell, Richard, (2016), “No hawks, no doves, only consensus: How central banks set interest rates”, VoxEu, 19 December