Open Forum: Market maker of last resort presents host of issues for central banks
Central banks should be wary of pitfalls when acting as market maker
Acting as market maker of last resort throws up a host of issues for central banks, but in a crisis they might find their options are limited, panellists at the Bank of England's (BoE) Open Forum said today (November 11).
During the 2008 crisis the BoE acted as a market maker of last resort in sterling bond markets, when they showed signs of "dislocations", as BoE deputy governor Minouche Shafik put it during a panel session. It was an important market, showing unusual activity over an extended
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