The Lender of Last Resort Function Under a Currency Board PDF Download
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Author: Caprio
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Languages : en
Pages : 0
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Publisher: World Bank Publications
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Category : Banco Central - Argentina
Languages : en
Pages : 54
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Author: Caprio
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Category :
Languages : en
Pages : 0
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Author:
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Category :
Languages : en
Pages : 47
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Author: Gerard Caprio
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Languages : en
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September 1996 No grand solution appears to exist for the problems that seem inevitable in the Argentine system, in which the Central Bank is both lender of last resort and currency board, providing full convertibility between pesos and U.S. dollars. Argentina's strategy therefore must turn on actively strengthening its banking systems to reduce solvency risks and on building its reserves. Within the current rules of the game, Argentina's central bank (BCRA) is charged with being the lender of last resort as well as providing full convertibility between pesos and U.S. dollars -- two objectives with one instrument, namely, reserves. Within those rules, it may well be that the balance of responsibilities needs to shift. Complete dollarization can significantly reduce risks but not entirely eliminate them. If the BCRA can concentrate more on building up reserves and helping to ward off crises of confidence in the currency, perhaps the banking system can protect itself better from liquidity shocks. But this will require, among other things, consolidation of the sector (which could give it greater access to outside liquidity) and prudential strengthening of the system. Triage of weaker banks should continue and not await another crisis. More experience with the new liquidity policy is needed and so is reform of the settlement system, as it affects the functioning of the interbank market, which is essential for containing crises. Essentially, however, no grand solution seems to exist for the problems that seem inevitable in a system where the central bank is also the currency board. Argentina's strategy must therefore turn on actively strengthening its banking systems to reduce the risks of insolvency. This paper -- a product of the Finance and Private Sector Development Division, Policy Research Department -- is part of a larger effort in the department to advise member countries on financial sector policy.
Author: Marc Dobler
Publisher: International Monetary Fund
ISBN: 1513567780
Category : Business & Economics
Languages : en
Pages : 63
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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: George S. Tavlas
Publisher: Springer Science & Business Media
ISBN: 1461562899
Category : Business & Economics
Languages : en
Pages : 247
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ical) and to self-fulfilling currency crisis, respectively. Research stressing the former approach was pioneered by Krugman (1979) and Flood and Garber (1984). According to this line of research, the failure of governments to adopt domestic monetary and fiscal policies consistent with their stated exchange rate targets leads to a gradual diminution of reserves and eventually a stock adjustment that depletes reserves suddenly in one attack (Sachs, Tornell, and Velasco, 1996, page 47). The result is either a devaluation of the exchange rate or a switch to floating. Subsequent work of this genre has specified a number of other channels, in addition to that involving inconsistent and unsustainable monetary and fiscal policies, that can precipitate an attack: 1. Inconsistency between external and internal objectives. The stances of monetary and fiscal policies may be consistent with the authorities' exchange rate target, but domestic economic indicators (such as the unemployment rate) may be inconsistent with internal balance, resulting in pressures on the authorities to relax macroeconomic policies. Private agents, aware of this inconsistency, perceive an opportunity for profits from a currency devaluation and precipitate an attack. 2. Contagion effects. Prior to an attack on another currency (say that of country B), the market may view a country's (say, country A's) exchange rate as consistent with economic fundamentals and, thus, sustainable.
Author: Forrest Capie
Publisher: Psychology Press
ISBN: 9780415323338
Category : Business & Economics
Languages : en
Pages : 502
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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: Hal S. Scott
Publisher: MIT Press
ISBN: 0262034379
Category : Business & Economics
Languages : en
Pages : 439
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Book Description
An argument that contagion is the most significant risk facing the financial system and that Dodd¬Frank has reduced the government's ability to respond effectively. The Dodd–Frank Act of 2010 was intended to reform financial policies in order to prevent another massive crisis such as the financial meltdown of 2008. Dodd–Frank is largely premised on the diagnosis that connectedness was the major problem in that crisis—that is, that financial institutions were overexposed to one another, resulting in a possible chain reaction of failures. In this book, Hal Scott argues that it is not connectedness but contagion that is the most significant element of systemic risk facing the financial system. Contagion is an indiscriminate run by short-term creditors of financial institutions that can render otherwise solvent institutions insolvent. It poses a serious risk because, as Scott explains, our financial system still depends on approximately $7.4 to $8.2 trillion of runnable and uninsured short-term liabilities, 60 percent of which are held by nonbanks. Scott argues that efforts by the Federal Reserve, the FDIC, and the Treasury to stop the contagion that exploded after the bankruptcy of Lehman Brothers lessened the economic damage. And yet Congress, spurred by the public's aversion to bailouts, has dramatically weakened the power of the government to respond to contagion, including limitations on the Fed's powers as a lender of last resort. Offering uniquely detailed forensic analyses of the Lehman Brothers and AIG failures, and suggesting alternative regulatory approaches, Scott makes the case that we need to restore and strengthen our weapons for fighting contagion.
Author: Robert W. Kolb
Publisher: SAGE Publications
ISBN: 1483381536
Category : Business & Economics
Languages : en
Pages : 8802
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Book Description
Thoroughly revised, updated, and expanded, The SAGE Encyclopedia of Business Ethics and Society, Second Edition explores current topics, such as mass social media, cookies, and cyber-attacks, as well as traditional issues including accounting, discrimination, environmental concerns, and management. The new edition also includes an in-depth examination of current and recent ethical affairs, such as the dangerous work environments of off-shore factories for Western retailers, the negligence resulting in the 2010 BP oil spill, the gender wage gap, the minimum wage debate and increasing income disparity, and the unparalleled level of debt in the U.S. and other countries with the challenges it presents to many societies and the considerable impact on the ethics of intergenerational wealth transfers. Key Features Include: Seven volumes, available in both electronic and print formats, contain more than 1,200 signed entries by significant figures in the field Cross-references and suggestions for further readings to guide students to in-depth resources Thematic Reader's Guide groups related entries by general topics Index allows for thorough browse-and-search capabilities in the electronic edition
Author: Lucía Satragno
Publisher: BRILL
ISBN: 9004508732
Category : Law
Languages : en
Pages : 225
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Book Description
The open access publication of this book has been published with the support of the Swiss National Science Foundation. In Monetary Stability as a Common Concern in International Law, Lucía Satragno argues that monetary stability is a global public good that must be promoted and protected at all levels of governance. In doing so, the book accomplishes two tasks. On one hand, it provides an up to date analysis of the role of law and institutions in the international monetary field since the collapse of the Bretton Woods system. On the other hand, it applies the methodological approach proposed by the novel doctrine of Common Concern of Humankind to monetary stability as a case study. Accordingly, the book examines not only the status quo of the international monetary system, but also looks at the ‘new and different realism’ that would be envisaged in monetary affairs in the case of a fully-fledged principle of Common Concern.
