Three Liquidity Crises in Retrospective: Implications for Central Banking Today

Arbeitspapier

Liquidity problems lie at the heart of crises on financial markets as demonstrated in this paper by detailed descriptions of the stock market crash in 1987, the LTCM-crisis in 1998 and the financial market consequences of 11 September 2001. The events also demonstrate that modern central banks, in particular the U.S. Federal Reserve under Alan Greenspan, provided emergency liquidity to limit the negative effects of such crises. However, the anecdotal and empirical evidence from the three crises shows that such emergency liquidity assistance implies risks to goods price stability if it is not focused on the interbank market and quickly sterilised.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Munich Discussion Paper ; No. 2007-26

Classification and Topics

• Classification: Wirtschaft ; Central Banks and Their Policies ; Financial Markets and the Macroeconomy ; General Financial Markets: General (includes Measurement and Data)
• Subject: Liquidity Crises ; Financial Stability ; Monetary Policy ; Liquidität ; Marktliquidität ; Finanzkrise ; Inflation ; Risiko ; Geldpolitik ; Inflationsbekämpfung ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sauer, Stephan
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (where): München
• (when): 2007

Further information

• DOI: doi:10.5282/ubm/epub.2011
• Handle: http://hdl.handle.net/10419/104242
• URN: urn:nbn:de:bvb:19-epub-2011-3
• Last update: 10.03.2025, 11:44 AM CET