IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/3011.html
   My bibliography  Save this paper

The Lender of Last Resort: Some Historical Insights

Author

Listed:
  • Michael D. Bordo

Abstract

This paper discusses the role for a lender of last resort (LLR) in preventing banking panics (section I) , then briefly considers classical and more recent concepts of the LLR (section II). Section III examines historical evidence for the U.S. and other countries on the incidence of banking panics and LLR actions, and the record of alternative LLR arrangements in the U.S., Scotland and Canada, as well as the historical record on ailouts. Section IV offers some lessons from history.

Suggested Citation

  • Michael D. Bordo, 1989. "The Lender of Last Resort: Some Historical Insights," NBER Working Papers 3011, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3011
    Note: ME
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w3011.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Goodhart, C A E, 1987. "Why Do Banks Need a Central Bank?," Oxford Economic Papers, Oxford University Press, vol. 39(1), pages 75-89, March.
    2. Marvin Goodfriend & Robert G. King, 1988. "Financial deregulation, monetary policy, and central banking," Economic Review, Federal Reserve Bank of Richmond, issue May, pages 3-22.
    3. Charles W. Calomiris, 1989. "Deposit insurance: lessons from the record," Economic Perspectives, Federal Reserve Bank of Chicago, issue May, pages 10-30.
    4. Hasan, I. & Dwyer, Jr.G.P., 1988. "Contagious Bank Runs In The Free Banking Period," Papers 22, Houston - Department of Economics.
    5. Timberlake, Richard H, Jr, 1984. "The Central Banking Role of Clearinghouse Associations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(1), pages 1-15, February.
    6. Arthur J. Rolnick & Warren E. Weber, 1986. "Inherent Instability in Banking: The Free Banking Experience," Cato Journal, Cato Journal, Cato Institute, vol. 5(3), pages 877-890, Winter.
    7. Michael D. Bordo, 1981. "The classical gold standard: some lessons for today," Review, Federal Reserve Bank of St. Louis, issue May, pages 2-17.
    8. Cowen, Tyler & Kroszner, Randall, 1989. "Scottish Banking before 1845: A Model for Laissez-Faire?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(2), pages 221-231, May.
    9. Oskar Morgenstern, 1959. "International Financial Transactions and Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number morg59-1, December.
    10. Weber, Ernst Juerg, 1988. "Currency Competition in Switzerland, 1826-1850," Kyklos, Wiley Blackwell, vol. 41(3), pages 459-478.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Bernanke, Ben S, 1983. "Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression," American Economic Review, American Economic Association, vol. 73(3), pages 257-276, June.
    2. Cordella, Tito & Yeyati, Eduardo Levy, 2003. "Bank bailouts: moral hazard vs. value effect," Journal of Financial Intermediation, Elsevier, vol. 12(4), pages 300-330, October.
    3. M. Berlemann & Nikolay Nenovsky, 2003. "Lending of First Versus Lending of Last Resort: The Bulgarian Financial Crisis of 1996/1997," Post-Print halshs-00260241, HAL.
    4. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    5. El-Shagi Makram & Ilgmann Cordelius, 2010. "Die Bedeutung der Besitzverflechtung von Kapitalgesellschaften für die Finanzmarktkrise / The importance of mutual ownership for the genesis of financial crisis," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 61(1), pages 299-324, January.
    6. Gerald Caprio & Michael Dooley & Danny Leipziger & Carl Walsh, 1996. "The lender of last resort function under a currency board: The case of Argentina," Open Economies Review, Springer, vol. 7(1), pages 625-650, March.
    7. Fernando Ossa, 2003. "Los Bancos Centrales como Prestamistas de Última Instancia," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(120), pages 323-335.
    8. Cordelius Ilgmann & Ulrich van Suntum, "undated". "Bad Banks: The Case of Germany," Working Papers 200110, Institute of Spatial and Housing Economics, Munster Universitary.
    9. Jane Sneddon Little & Giovanni P. Olivei, 1999. "Why the interest in reforming the International Monetary System?," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 53-84.
    10. Bernstein, Asaf & Hughson, Eric & Weidenmier, Marc D., 2010. "Identifying the effects of a lender of last resort on financial markets: Lessons from the founding of the fed," Journal of Financial Economics, Elsevier, vol. 98(1), pages 40-53, October.
    11. Nenovsky, Nikolay & Hristov, Kalin, 2002. "The new currency boards and discretion: empirical evidence from Bulgaria," Economic Systems, Elsevier, vol. 26(1), pages 55-72, April.

    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:nbr:nberwo:3011. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.