Showing 1 - 10 of 1,266
We use the founding of the Federal Reserve as a historical experiment to provide some insight into whether a lender of last resort can stabilize financial markets. Following the Panic of 1907, Congress passed two measures that established a lender of last resort in the United States: (1) the...
Persistent link: https://www.econbiz.de/10012769641
We consider how a central bank digital currency (CBDC) could transform all aspects of the monetary system and facilitate the systematic and transparent conduct of monetary policy. In particular, we find that CBDC can serve as a practically costless medium of exchange, secure store of value, and...
Persistent link: https://www.econbiz.de/10012949410
Central banking in an age of digital currencies is a fast-developing topic in monetary economics. Algorithmic digital currencies such as bitcoin appear to be viable competitors to central bank fiat currency, and their presence in the marketplace may pressure central banks to pursue tighter...
Persistent link: https://www.econbiz.de/10012992627
-scale intermediation by competing with private financial intermediaries for deposits. Yet, since a central bank is not an investment expert … that shows that absent a banking panic, the set of allocations achieved with private financial intermediation will also be …
Persistent link: https://www.econbiz.de/10012841420
Our paper examines Charles Goodhart's work on the history of monetary institutions: central bank operations under the gold standard, their behaviour in relation to the financial system in which they functioned, including their responses to banking crises, and their performance as lenders of last...
Persistent link: https://www.econbiz.de/10013231195
This paper examines the origins and early performance of the Federal Reserve as lender of last resort. The Fed was established to overcome the problems of the National Banking era, in particular an "inelastic" currency and the absence of an effective lender of last resort. As conceived by Paul...
Persistent link: https://www.econbiz.de/10013130489
Gorton and Huang (2001) argue that private coalitions of banks can act as central banks, issuing private money and providing deposit insurance during times of panic. This lender-of-last-resort role depends upon banking panics occurring threat of liquidation makes the private bank coalition...
Persistent link: https://www.econbiz.de/10012767809
We present a model of optimal intervention in a flight to quality episode. The reason for intervention stems from a collective bias in agents' expectations. Agents in the model make risk management decisions with incomplete knowledge. They understand their own shocks, but are uncertain of how...
Persistent link: https://www.econbiz.de/10012760384
This paper surveys the role of the Federal Reserve within the financial regulatory system, with particular attention to the interaction of the Fed's role as both a supervisor and a lender-of-last-resort (LOLR). The institutional design of the Federal Reserve System was aimed at preventing...
Persistent link: https://www.econbiz.de/10013077960
This paper discusses the role for a lender of last resort (LLR) in preventing banking panics (section I) , then briefly considers classical and more recent concepts of the LLR (section II). Section III examines historical evidence for the U.S. and other countries on the incidence of banking...
Persistent link: https://www.econbiz.de/10012763374