Lender of last resort function must be flexible to cope with crises, BoE’s Hauser says
Central banks should prepare in advance, executive director says
Central banks seeking to avoid over-generosity in their lender of last resort (LOLR) frameworks should build in flexibility for times of crisis, Andrew Hauser, the Bank of England's (BoE) executive director for banking, payments and financial resilience, said on February 10.
While offering liquidity on generous terms could create moral hazard, excessive rigidity in the framework could trigger unnecessary crises, Hauser told a conference on LOLR in Washington, DC. This becomes particularly
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