Central Banking for Financial Stability: Some Lessons from the Recent Instability in the United States and Euro Area
AbstractCentral banks have had an important role in maintaining financial stability through their lender of last resort role. As lender of last resort, the central bank is given enormous power which is normally tempered by a variety of limits. In the most recent crises in both the United States and euro area, the Federal Reserve and European Central Bank (ECB) have come under enormous pressure to take lender of last resort actions that exceed these normal bounds. This paper reviews the experience of these two central banks and draws some implications for future policy.
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Bibliographic InfoPaper provided by Asian Development Bank Institute in its series ADBI Working Papers with number 379.
Length: 37 pages
Date of creation: 04 Sep 2012
Date of revision:
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central banking; financial stability; united states; euro area; federal reserve; european central bank;
Find related papers by JEL classification:
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-CBA-2012-09-09 (Central Banking)
- NEP-EEC-2012-09-09 (European Economics)
- NEP-MAC-2012-09-09 (Macroeconomics)
- NEP-MON-2012-09-09 (Monetary Economics)
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