The International Lender of Last Resort How Large is Large Enough?

By Olivier Jeanne, Charles Wyplosz. Social Science Research Network, 2001

112 citations recorded by the source corpus.

This paper considers how an international lender of last resort (LOLR) can prevent self-fulfilling banking and currency crises in emerging economies. We compare two different arrangements: one in which the international LOLR injects liquidity into international financial markets, and one in which its resources are used to back domestic banking safety nets. Both arrangements would require important changes in the global financial architecture: the first one would require a global central bank issuing an international currency, while the second one would have to be operated by an 'international banking fund' closely involved in the supervision of domestic banking systems.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/5e049304fffd968031df8d110825bf75745a2947

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. D. Begg
2. Pablo García
3. Claudio Soto

In Finance

1. D. Begg
2. Pablo García
3. Claudio Soto

Citations in the corpus

• The US Dollar Shortage in Global Banking and the International Policy Response (2009, unknown): “An international institution may find it difficult to contain moral hazard when lending to banks outside its regulatory and supervisory reach (Jeanne and Wyplosz (2003)).”
• THE IMF: A BIRD'S EYE VIEW OF ITS ROLE AND OPERATIONS (2007, unknown): “…both debtors and creditors may respond to an infusion of 57 resources from the IMF and the extent to which partial ‘bail outs’ will restore financial stability (see, for example, Corsetti et al, 2003; Jeanne and Zettelmeyer, 2001; Jeanne and Wyplosz, 2001; Zettelmeyer, 2000; Morris and Shin, 2003).”
• Large Hoardings of International Reserves: Are They Worth It? (2004, background): “See, for example, Sachs, Tornell and Velasco (1996); Chang and Velasco (1999); Jeanne and Wyplosz (2001).”
• Sustainable Regimes of Capital Movements in Accession Countries (2003, background): “Even when there are no exchange rate pegs, large and sudden movements in the exchange rate caused by sudden changes in market perceptions of economic policies can still trigger crises in the banking and financial sector owing to significant mismatches in the currency and maturity structure of this s”
• Foreign Participation in Local-Currency Bond Markets (2004, unknown): “We then utilize the risk and return characteristics in the 3 There are other ways to avoid the problems associated with currency mismatches; see, for example, Jeanne and Wyplosz (2001).”