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Liquidity Shocks, Banking System Failures, and Supranational Lending of Last Resort Facilities

Author

Listed:
  • Germana Corrado

    (University of Rome "Tor Vergata", Faculty of Economics)

Abstract

In a small open economy with a high share of short term foreign currency denominated debt the arrival of some negative information on banks' investment returns may lead to severe bank runs. We analyse how a supranational institution which acts as an international lender of last resort can cope with banking crises by guaranteeing run-proof bank deposit contracts.

Suggested Citation

  • Germana Corrado, 2005. "Liquidity Shocks, Banking System Failures, and Supranational Lending of Last Resort Facilities," Annals of Economics and Finance, Society for AEF, vol. 6(1), pages 1-24, May.
    • Handle: RePEc:cuf:journl:y:2005:v:6:i:1:p:1-24
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    References listed on IDEAS

    as
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    Cited by:

    1. Liu, Luke, 2011. "Asset price, asset securitization and financial stability," MPRA Paper 35000, University Library of Munich, Germany.

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    More about this item

    Keywords

    Fundamental-based bank runs; Run-proof deposit contracts; International lender of last resort;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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