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The Lender of Last Resort in the European Single Financial Market

Author

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  • Pedro Gustavo Teixeira
  • Garry J. Schinasi

Abstract

This paper examines challenges in effectively implementing the lender-of-last-resort function in the EU single financial market. Briefly highlighted are features of the EU financial landscape that could increase EU systemic financial risk. Briefly described are the complexities of the EU's financialstability architecture for preventing and resolving financial problems, including lender-of-last-resort operations. The paper examines how the lender-of-last-resort function might materialize during a systemic financial disturbance affecting more than one EU member state. The paper identifies challenges and possible ways of enhancing the effectiveness of the existing architecture.

Suggested Citation

  • Pedro Gustavo Teixeira & Garry J. Schinasi, 2006. "The Lender of Last Resort in the European Single Financial Market," IMF Working Papers 06/127, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:06/127
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    References listed on IDEAS

    as
    1. Jean-Charles Rochet & Xavier Vives, 2004. "Coordination Failures and the Lender of Last Resort: Was Bagehot Right After All?," Journal of the European Economic Association, MIT Press, vol. 2(6), pages 1116-1147, December.
    2. Dirk Schoenmaker & Sander Oosterloo, 2005. "Financial Supervision in an Integrating Europe: Measuring Cross-Border Externalities," International Finance, Wiley Blackwell, vol. 8(1), pages 1-27, July.
    3. Michel Aglietta, 1999. "A Lender of Last Resort for Europe," Working Papers 1999-12, CEPII research center.
    4. Rosa M. Lastra & Dr Rosa Lastra, 2003. "The Governance Structure for Financial Regulation and Supervision in Europe," FMG Special Papers sp149, Financial Markets Group.
    5. Garry J. Schinasi, 2003. "Responsibility of Central Banks for Stability in Financial Markets," IMF Working Papers 03/121, International Monetary Fund.
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    Cited by:

    1. Friederike Niepmann & Tim Schmidt-Eisenlohr, 2013. "Bank Bailouts, International Linkages, and Cooperation," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 270-305, November.
    2. Kenneth Sullivan, 2008. "Presentación proactiva del desempeño," Boletín, Centro de Estudios Monetarios Latinoamericanos, vol. 0(3), pages 130-135, Julio-sep.
    3. Barry Eichengreen, 2008. "Sui Generis EMU," NBER Working Papers 13740, National Bureau of Economic Research, Inc.
    4. Hertig Gerard & Lee Ruben & McCahery Joseph A., 2010. "Empowering the ECB to Supervise Banks: A Choice-Based Approach," European Company and Financial Law Review, De Gruyter, vol. 7(2), pages 171-215, January.
    5. Helge Berger & Carsten Hefeker, 2008. "Does financial integration make banks more vulnerable? Regulation, foreign owned banks, and the lender-of-last resort," International Economics and Economic Policy, Springer, vol. 4(4), pages 371-393, February.
    6. Stijn Claessens & Luc Laeven & Deniz O Igan & Giovanni Dell'Ariccia, 2010. "Lessons and Policy Implications from the Global Financial Crisis," IMF Working Papers 10/44, International Monetary Fund.
    7. Martin Cihak & Jörg Decressin, 2007. "The Case for a European Banking Charter," IMF Working Papers 07/173, International Monetary Fund.
    8. Maria J. Nieto & Garry J. Schinasi, 2008. "Towards an EU Framework for Safeguarding Financial Stability," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(3), pages 27-36, October.
    9. Fritz Breuss, 2009. "Lack of Cyclical Convergence Puts Euro Area at Risk," WIFO Monatsberichte (monthly reports), WIFO, vol. 82(2), pages 125-138, February.
    10. Vítor Gaspar & Garry Schinasi, 2010. "Financial Stability and Policy Cooperation," Working Papers o201001, Banco de Portugal, Economics and Research Department.
    11. Banco Central Europeo, 2008. "La titulización en la zona del euro," Boletín, Centro de Estudios Monetarios Latinoamericanos, vol. 0(3), pages 136-149, Julio-sep.
    12. Stijn Claessens & Giovanni Dell'Ariccia & Deniz Igan & Luc Laeven, 2010. "Cross-country experiences and policy implications from the global financial crisis," Economic Policy, CEPR;CES;MSH, vol. 25, pages 267-293, April.

    More about this item

    Keywords

    Central banks; Central banks and their policies; Financial systems; European Union; European Monetary System; International financial markets; International monetary system; International capital markets; Lender of last resort; European single financial market; policy coordination; banking; financial stability; financial market; financial markets; financial services; International Monetary Arrangements and Institutions; Financial Aspects of Economic Integration; International Policy Coordination and Transmission; General Financial Markets: Government Policy and Regulation; Financial Institutions and Services: Government Policy and Regulation; Structure and Scope of Government: General; Economic History: Financial Markets and Institutions: General; International; or Comparative;

    JEL classification:

    • F39 - International Economics - - International Finance - - - Other
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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