Chapter

Central Banks, Liquidity, and the Banking Crisis<sup>1</sup>

Philip Turner

in Time for a Visible Hand

Published in print January 2010 | ISBN: 9780199578801
Published online February 2010 | e-ISBN: 9780191723285 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199578801.003.0006

Series: Initiative for Policy Dialogue

Central Banks, Liquidity, and the Banking Crisis1

More Like This

Show all results sharing this subject:

  • Macroeconomics and Monetary Economics

GO

Show Summary Details

Preview

Turner examines the principles underlying central bank liquidity actions taken during the financial crisis. The toolkit of central banks has expanded dramatically. A bigger toolkit seems always better, provided those using its potentially dangerous tools are fully cognizant of the attendant risks. Only central banks can provide the assurances of liquidity often needed in a financial crisis. In the extreme conditions prevailing in autumn 2008, it was natural that fighting the crisis received priority. Before this crisis, nobody expected the scale of operations central banks would be drawn into—and many of these operations will at some point have to be unwound. A lot of these measures, however, will probably be permanent. Turner suggests three areas where the changes decided on during this crisis are likely to endure: increased term financing, wider deposit arrangements at the central bank, and better cross border provision of liquidity.

Keywords: liquidity crises; liquidity assistance by central banks; expanding role of central banks

Chapter.  9549 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.