A Selective Bail-Out International Lending of Last Resort Model
AbstractIn the event of third generation crisis, international lending of last resort should be used if and only if the ILLOR is informed on the subject of financial and banking domestic markets. Therefore, if will act at a macroeconomic level, as a usual ILLOR, but also at a microeconomic level, since there will be selective lending to commercial banks. Our model shows that there are two conditions of optimality of this intervention: first, the country should be eligible; second, only solvent banks should be bailed out.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Society for AEF in its journal Annals of Economics and Finance.
Volume (Year): 9 (2008)
Issue (Month): 1 (May)
Lender of last resort; Capital account crises; Systematic risk; Financial stability; Inter-Bank market;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrew Powell & María Soledad Martinez Peria & Ivanna Vladkova, 2002.
"Banking on Foreigners: The Behaviour of International Bank Lending to Latin America, 1985-2000","
Business School Working Papers
veintiseis, Universidad Torcuato Di Tella.
- Martinez Peria, Maria Soledad & Powell, Andrew & Hollar, Ivanna Vladkova, 2002. "Banking on foreigners : the behavior of international Bank lending to Latin America, 1985-2000," Policy Research Working Paper Series 2893, The World Bank.
- David Laidler, 2004. "Central Banks as Lenders of Last Resort - Trendy or Passe?," University of Western Ontario, Economic Policy Research Institute Working Papers 20048, University of Western Ontario, Economic Policy Research Institute.
- Barry Eichengreen & Christof Ruehl, 2000.
"The Bail-In Problem: Systematic Goals, Ad Hoc Means,"
NBER Working Papers
7653, National Bureau of Economic Research, Inc.
- Eichengreen, Barry & Ruhl, Christof, 2001. "The bail-in problem: systematic goals, ad hoc means," Economic Systems, Elsevier, vol. 25(1), pages 3-32, March.
- Eichengreen, Barry & Ruehl, Christoph, 2000. "The Bail-In Problem: Systematic Goals, Ad Hoc Means," CEPR Discussion Papers 2427, C.E.P.R. Discussion Papers.
- Gary Gorton & Lixin Huang, 2002.
"Bank Panics and the Endogeneity of Central Banking,"
NBER Working Papers
9102, National Bureau of Economic Research, Inc.
- Gorton, Gary & Huang, Lixin, 2006. "Bank panics and the endogeneity of central banking," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1613-1629, October.
- Gary Gorton & Lixin Huang, 2002. "Bank Panics and the Endogeneity of Central Banking," Center for Financial Institutions Working Papers 02-29, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Kahn, Charles M. & Santos, Joao A.C., 2005.
"Allocating bank regulatory powers: Lender of last resort, deposit insurance and supervision,"
European Economic Review,
Elsevier, vol. 49(8), pages 2107-2136, November.
- Charles M. Kahn & João A. C. Santos, 2001. "Allocating bank regulatory powers: lender of last resort, deposit insurance and supervision," BIS Working Papers 102, Bank for International Settlements.
- Charles M. Kahn & João A.C. Santos, 2001. "Allocating bank regulatory powers: lender of last resort, deposit insurance, and supervision," Proceedings 717, Federal Reserve Bank of Chicago.
- Chriatian Just, 2004. "The International Financial Architecture: Official Proposals on Crisis Resolution and the Role of the Private Sector," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 73-89, May.
- Hassan Naqvi, 2004. "Banking Crises and the Lender of Last Resort: How crucial is the role of information?," Finance 0410009, EconWPA.
- Michael Taylor & Marc Quintyn, 2002. "Regulatory and Supervisory Independence and Financial Stability," IMF Working Papers 02/46, International Monetary Fund.
- Se-Jik Kim, 2004. "Timing of International Bailouts," IMF Working Papers 04/9, International Monetary Fund.
- Michael D. Bordo, 1990. "The lender of last resort : alternative views and historical experience," Economic Review, Federal Reserve Bank of Richmond, issue Jan, pages 18-29.
- 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.
- Calzolari, Giacomo & Loranth, Gyongyi, 2005.
"Regulation of multinational banks: a theoretical inquiry,"
Working Paper Series
0431, European Central Bank.
- Calzolari, Giacomo & Loranth, Gyongyi, 2011. "Regulation of multinational banks: A theoretical inquiry," Journal of Financial Intermediation, Elsevier, vol. 20(2), pages 178-198, April.
- Calzolari, Giacomo & Lóránth, Gyöngyi, 2004. "Regulation of Multinational banks: A Theoretical Inquiry," CEPR Discussion Papers 4232, C.E.P.R. Discussion Papers.
- Charles Goodhart, 1999. "Myths About the Lender of Last Resort," FMG Special Papers sp120, Financial Markets Group.
- Andrew G Haldane & Jorg Scheibe, 2004. "IMF lending and creditor moral hazard," Bank of England working papers 216, Bank of England.
- Helmut Elsinger & Alfred Lehar & Martin Summer, 2006.
"Using Market Information for Banking System Risk Assessment,"
International Journal of Central Banking,
International Journal of Central Banking, vol. 2(1), March.
- Elsinger, Helmut & Lehar, Alfred & Summer, Martin, 2005. "Using Market Information for Banking System Risk Assessment," MPRA Paper 817, University Library of Munich, Germany.
- Steven Radelet & Jeffrey D. Sachs, 1998. "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 1-90.
- Charles A. E. Goodhart & Haizhou Huang, 1999.
"A model of the lender of last resort,"
Federal Reserve Bank of San Francisco.
- João A. C. Santos, 2000. "Bank capital regulation in contemporary banking theory: a review of the literature," BIS Working Papers 90, Bank for International Settlements.
- Corsetti, Giancarlo & Guimarães, Bernardo & Roubini, Nouriel, 2004. "International Lending of Last Resort and Moral Hazard: A Model of the IMF's Catalytic Finance," CEPR Discussion Papers 4383, C.E.P.R. Discussion Papers.
- Falko Fecht & Marcel Tyrell, 2004.
"Optimal Lender of Last Resort Policy in Different Financial Systems,"
- Fecht, Falko & Tyrell, Marcel, 2004. "Optimal lender of last resort policy in different financial systems," Discussion Paper Series 1: Economic Studies 2004,39, Deutsche Bundesbank, Research Centre.
- Mark M. Spiegel, 2000. "Solvency runs, sunspot runs, and international bailouts," Working Papers in Applied Economic Theory 2001-05, Federal Reserve Bank of San Francisco.
- Haizhou Huang & Charles Goodhart, 1999.
"A Simple Model of an International Lender of Last Resort,"
FMG Discussion Papers
dp336, Financial Markets Group.
- Haizhou Huang & C. A. E. Goodhart, 2000. "A Simple Model of an International Lender of Last Resort," IMF Working Papers 00/75, International Monetary Fund.
- repec:fip:fedhpr:y:2002:i:may:p:150-163 is not listed on IDEAS
- Marvin Barth & Eli Remolona & Philip Wooldridge, 2002. "Changes in market functioning and central bank policy: an overview of the issues," BIS Papers chapters, in: Bank for International Settlements (ed.), Market functioning and central bank policy, volume 12, pages 1-24 Bank for International Settlements.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Qiang Gao).
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.