Arbeitspapier

Lender of last resort and bank closure policy

During the last decades a consensus has emerged that it is impossible to disentangle liquidity shocks from solvency shocks. As a consequence the classical lender of last resort rules, as defined by Thornton and Bagehot, based on lending to solvent illiquid institutions appear ill-suited to this environment. We summarize here the main contributions that have developed considering this new paradigm and discuss how institutional features relating to bank closure policy influences lender of last resort and other safety net issues. We devote particular emphasis to the analysis of systemic risk and contagion in banking and the role of the lender of last resort to prevent it.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 2286

Classification
Wirtschaft
Central Banks and Their Policies
Subject
lender of last resort
systemic risk
contagion
bank closure
liquidity
discount window
Lender of Last Resort
Bankenaufsicht
Bankinsolvenz
Bankenliquidität
Bankenkrise
Theorie

Event
Geistige Schöpfung
(who)
Freixas, Xavier
Parigi, Bruno Maria
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2008

Handle
Last update
10.03.2025, 11:46 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Freixas, Xavier
  • Parigi, Bruno Maria
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2008

Other Objects (12)