rule cannot be implemented when the central bank uses standing facilities, while it can be implemented with open market …

. Freeman's conclusion that the central bank should absorb losses related to default to provide risk-sharing goes against the … concern that central banks should limit their exposure to credit risk. We extend Freeman's model by introducing moral hazard …. With moral hazard, the central bank should avoid absorbing losses, contrary to Freeman's argument. However, we show that …

An increasing number of central banks implement monetary policy via two standing facilities: a lending facility and a … the central bank requires government bonds as collateral. We also calibrate the model and discuss the behavior of the …

run on the currency if the central bank attempts to act as a lender of last resort. …

the Panic of 1907. But why did the successful movement for creating a U.S. central bank follow the Panic of 1907 and not …

-Dybvig model. The banking system, the exchange rate regime, and central bank credit policy are seen as parts of a mechanism … system implements the social optimum and eliminates runs, provided the exchange rate and central bank lending policies are …