IDEAS home Printed from https://ideas.repec.org/a/bla/intfin/v1y1998i2p311-325.html
   My bibliography  Save this article

Can there be an International Lender‐of‐Last‐Resort?

Author

Listed:
  • Forrest Capie

Abstract

A proper understanding of the term lender‐of‐last‐resort shows that there can be no international version. After outlining the nature of financial crises, the lender‐of‐last‐resort is defined, and its origins traced in the history of thought and in British experience in the nineteenth century. A lender‐of‐last‐resort is what it is by virtue of the fact that it alone provides the ultimate means of payment. There is no international money and so there can be no international lender‐of‐last‐resort. The function of such a lender is to provide the market with liquidity in times of need, and not to rescue individual institutions. Such rescues involve too much moral hazard. International institutions are invariably focused on one ‘customer’– a country in difficulties – and so violate this rule of the lender‐of‐last‐resort.

Suggested Citation

  • Forrest Capie, 1998. "Can there be an International Lender‐of‐Last‐Resort?," International Finance, Wiley Blackwell, vol. 1(2), pages 311-325, December.
    • Handle: RePEc:bla:intfin:v:1:y:1998:i:2:p:311-325
    DOI: 10.1111/1468-2362.00014
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-2362.00014
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1468-2362.00014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stanley Fischer, 1999. "On the Need for an International Lender of Last Resort," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 85-104, Fall.
    2. Shim, Ilhyock & Sharma, Sunil & Chami, Ralph, 2008. "A Model of the IMF as a Coinsurance Arrangement," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 2, pages 1-41.
    3. Olivier Jeanne & Charles Wyplosz, 2003. "The International Lender of Last Resort. How Large Is Large Enough?," NBER Chapters, in: Managing Currency Crises in Emerging Markets, pages 89-124, National Bureau of Economic Research, Inc.
    4. George G. Kaufman, 1999. "Banking and currency crises and systemic risk: a taxonomy and review," Working Paper Series WP-99-12, Federal Reserve Bank of Chicago.
    5. George G. Kaufman, 2000. "Banking and currency crisis and systemic risk: lessons from recent events," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 25(Q III), pages 9-28.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:intfin:v:1:y:1998:i:2:p:311-325. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1367-0271 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.