In this paper we explore lessons from the global liquidity crisis pertaining to the prudential supervision role of central bank in an open economy. The narrow view of the role of central banks has been seriously challenged by the global liquidity crisis of 2008-9. The crisis validates central...

The evolution of institutions in the US and other unions provides clear lessons. There are large gains from buffering currency unions with a union-wide deposit insurance, and partial debt mutualisation. The credibility of a union deposit insurance scheme requires transparent funding and...