Hidden Bibliographic Details
| Other uniform titles: | IMF eLibrary.
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| Other authors / contributors: | Dehesa, M. (Mario)
Druck, Pablo.
International Monetary Fund.
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| ISBN: | 145191525X
9781451915259
9781451870725
1451870728
9781451915259
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| Notes: | Available in PDF, ePUB, and Mobi formats on the Internet.
Includes bibliographical references.
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| Summary: | The paper analyzes the challenges for the Eastern Caribbean Central Bank (ECCB) to be an effective lender of last resort (LOLR) as part of a modern banking crisis resolution framework. The main results from the theoretical model of the ECCB's institutional arrangement are that the majority of currency union members may veto emergency lending in the case of a member-specific shock, as such lending may endanger the stability of the currency board (by lowering the central bank's international reserves, thus raising devaluation risk). However, in the presence of contagion across countries, all currency union members have a vested interest in liquidity supply from the central bank. A key policy recommendation is that currency union members need a stronger fiscal position to continue to access international financial markets and sustain the exchange rate peg.
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| Other form: | Print version: Druck, Pablo. Eastern Caribbean Central Bank: Challenges to an Effective Lender of Last Resort. Washington : International Monetary Fund, ©2008 9781451870725
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| Standard no.: | 10.5089/9781451915259.001
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