Lender of last resort
Dollar crunch eases as central banks step up swaps action
Core swap recipients will offer daily dollar auctions; cross-currency basis narrows
Bailey says BoE ‘will do what it takes’
BoE governor echoes Draghi after sterling plunges despite creation of new lending facility
The Fed can still do more – Donald Kohn
The Fed still has several tools left if economic conditions worsen, Kohn argues in blog
Richmond Fed paper examines use of discount window
Facility not typically used in “life or death” scenarios, researchers find
Central banks and banks: a changed relationship
The development of large, complex international capital markets has reshaped the relationship between central banks and their commercial counterparts
Lagarde misstep overshadows ‘bold’ measures, analysts say
ECB president seemed to have hampered governments’ debt financing at a critical juncture
Why Bulgaria needs to deepen its currency board
The BNB’s currency board rules should be extended to transaction deposits at commercial banks, which could in turn issue digital currencies, even in the event of euro adoption
Climate risk models not up to scratch, warns BIS report
New research highlights models’ inability to accurately anticipate climate risk; says central banks must not become “climate rescuers of last resort”
Book notes: The Japanese central banking system compared with its European and American counterparts, by Yoshiharu Oritani
The book has “no equal” in reviewing new microeconomic theory for central banking
World risks ‘global liquidity crunch’, former BIS officials warn
“Urgent action” needed to prevent crisis, say Philip Turner and André Icard
Norges Bank lays out plans for collateral management during resolution
Liquidity assistance in a resolution will “never” be a long-term solution, Torbjørn Hægeland says
Hong Kong introduces resolution facility after FSB peer review
Updated funding framework could aid embattled banks in case of liquidity crunch
Agustín Carstens on fixing the global monetary system
The BIS chief speaks about how to strengthen the global safety net, vulnerabilities in emerging markets and the challenges and opportunities posed by fintech
Central banks should use direct lending in shocks – BIS paper
Lending to firms directly could reduce welfare loss during financial shocks, researchers say
Fischer warns Trump could sabotage Fed crisis response
Fed independence under “unprecedented” threat and second Trump term would harm US – Fischer
CBDC need not pose stability threat – paper
Markus Brunnermeier and Dirk Niepelt say some arguments about CBDC are “questionable”
BIS study asks whether central bank crisis actions de-risk the balance sheet
Authors study whether a central bank can influence its own risk, or if this is “wishful thinking”
Book notes: EuroTragedy, by Ashoka Mody
The former International Monetary Fund insider elegantly tells the story of the creation of the currency that has defied economics, warning that it could get “worse, much worse”
Lack of monetary autonomy ‘central’ to eurozone debt crisis – researchers say
Spain would have been ‘immune’ to rollover debt crisis outside eurozone – Minneapolis Fed paper
Podcast: How to fight the next crisis
In the last of the series, Yale’s Andrew Metrick warns we may be less prepared for crisis-fighting now than we were before 2008
Fed’s emergency lending facilities eased funding pressures, researchers find
Facilities likely avoided severe sale of assets at fire-sale prices, authors say
Book notes: The Fed and Lehman Brothers, by Laurence Ball
Ball claims the Fed could have lent to Lehmans, lawfully and prudently, had it chosen to do so, writes Reddell. But agreeing the Fed could have provided liquidity support does not automatically imply it should have
RBI prepared to step in as non-banks suffer liquidity shortage
Government and regulators stress readiness to act amid non-bank liquidity pressures
Book notes: Till Time’s Last Sand, by David Kynaston
Kynaston allows readers to develop their own understanding of how the BoE has had to refind its place in a country where the political system has migrated from commercial republic to full-franchise democracy