A working paper, published by the European Central Bank on October 1, analyses how international monetary regimes affect the ability of central banks to deal with funding crises that encompass both the private and public sectors.

The authors, Ulrich Bindseil and Adalbert Winkler, say central banks can take a wider approach to liquidity crises when they operate under a paper standard with a flexible exchange rate. Indeed, a central bank that is largely unconstrained in its provision of liquidity