Market maker of last resort: Difference between revisions
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*[[Central bank]] | *[[Central bank]] | ||
*[[Financial stability]] | *[[Financial stability]] | ||
*[[Lender of last resort]] | |||
*[[Liquidity]] | *[[Liquidity]] | ||
*[[Market maker]] | *[[Market maker]] | ||
*[[Monetary policy]] | *[[Monetary policy]] | ||
Revision as of 21:03, 7 August 2016
Financial markets - central oversight.
(MMLR).
Market maker of last resort describes exceptional market intervention by a central bank.
In normal times, central banks support market liquidity by providing liquidity insurance to individual institutions.
Exceptionally, a central bank may stand ready to act as a temporary market maker of last resort, to improve the liquidity of one or more markets whose illiquidity posed a threat to financial stability, or was judged to be important to the transmission mechanism of monetary policy.
