The Superfluity Of An International Lender Of Last Resort

We have argued that the risks of an international banking crisis have actually diminished over recent years. But we still need to consider the case for an international lender of last resort (LOLR) to cope with the risk of an international banking crisis. If the risk of such an internationally transmitted crisis really is as low as we judge, then no one would need to make the case for such an international LOLR. But suppose that we are wrong, and the risks of an international banking crisis in the early part of this century are actually rather high. Some might then argue that an international LOLR is needed to avert the threat of such a crisis.

This final section of this chapter argues to the contrary, that even if the risk of an international transmission of banking crises is high, very much higher than we suppose, an international LOLR is superfluous. This is because, in the event of an internationally transmitted banking crisis, the role of LOLR in supplying liquidity is fully satisfied by the domestic LOLR.

Financial End Game

Financial End Game

How to profit from the global crisis and make big bucks big time! The current global financial crisis has its roots embedded in the collapse of the subprime markets in the United States. As at October 2007 there was an estimated loss on the subprime market of approximately 250 billion. If you want to come out on top, you have come to the right place.

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