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Oganesyan, Gayane
Year of Publication: 
Series/Report no.: 
Working Paper No. 19/2013
This paper analyzes whether the Lender of Last Resort function has changed in consequence of the recent Global Financial Crisis. The unprecedented emergency actions of the Federal Reserve, European Central Bank and the Bank of England are analyzed in terms of Walter Bagehot's traditional Lender of Last Resort doctrine. The central banks' actions are compared to identify the extensions and paint a general picture of the modern and much more comprehensive Lender of Last Resort function, which includes provision of liquidity and collateral, lowering interest rates and expansionary monetary policy, loosening collateral standards, supporting critical institutions, opening special liquidity facilities that target specific markets or groups of agents, and becoming market maker of last resort and buyer of last resort. The Lender of Last Resort function has been found to have changed.
Lender of Last Resort
Walter Bagehot's Lombard Street
penalty rate
secure collateral
solvency and illiquidity
monetary policy
Federal Reserve Bank
European Central Bank
Bank of England
Market Maker of Last Resort
quantitative easing
Buyer of Last Resort
Document Type: 
Working Paper

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