Connectedness and Contagion by Scott Hal S.;

Author:Scott, Hal S.;
Language: eng
Format: epub
Publisher: The MIT Press
Published: 2016-04-26T10:35:06+00:00

Notes

1. Committee on the Global Financial System, Asset encumbrance, financial reform and the demand for collateral assets, 49 CGFS Papers 1 (May 2013).

2. Id.

3. Eric Rosengren, Speech at 22nd Annual Hyman P. Minsky Conference on the State of the U.S. and World Economies (Apr. 17, 2013).

4. See Press Release, European Central Bank, Technical features of outright monetary transactions (Sep. 6, 2012), available at http://www.ecb.europa.eu/press/pr/date/2012/html/pr120906_1.en.html.

5. Sometimes referred to as “constructive ambiguity” as well.

6. Bank for International Settlements, Re-thinking the lender of last resort, BIS Paper 79, 5–7 (Sep. 2014).

7. See Xavier Freixas, Optimal bail-out policy, conditionality and creative ambiguity, CEPR Discussion Paper 2238, Centre for Economic Policy Research 1 (1999) (finding that ambiguity may have its merits in some cases [by reducing moral hazard], but when banks are large, the social cost of their bankruptcy is too high); Haizhou Hang and Charles Goodhart, A model of the lender of last resort (IMF Working Paper 99/399, Mar. 1999) (finding that justifications for ambiguity decrease strongly in bank size due to contagion concerns); Tito Cordella and Eduardo Yeyati, Bank bailouts: Moral hazard vs. value effect, 12.4 J. Fin. Intermed. 300 (2003) (finding that the possible moral hazard effect of a lender of last resort is outweighed by an increase in charter value that comes from an unambiguous LLR commitment).

8. Dietrich Domanski and Vladyslav Sushko, Rethinking the Lender of Last Resort: Workshop Summary, BIS 1 (2014), available at http://www.bis.org/publ/bppdf/bispap79a_rh.pdf.

9. Evangeline Drossos and Spence Hilton, The Federal Reserve’s Contingency Financing Plan for the century date change, Fed. Res. Bank of New York, 6.15 Curr. Issues Econ. Fin.1 (Dec. 2000).

10. Id.

11. Id.

12. Id.

13. Id. at 6.

14. Bruce Tuckman, Federal liquidity options: Containing runs on deposit-like assets without bailouts and moral hazard, Center for Financial Stability Policy Paper 1 (Jan. 24, 2012).

15. Id.

16. Id.

17. Id.

18. Id.

19. Id.

20. Press Release, Bd. of Governors of the Fed. Res. Sys. (Sep. 19, 2008); Federal Reserve, Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (2010), available at http://www.federalreserve.gov/monetarypolicy/abcpmmmf.htm.

21. Ben Bernanke, Chairman, Federal Reserve, Speech at the Council on Foreign Relations, Financial reform to address systemic risk (Mar. 10, 2009), available at http://www.federalreserve.gov/newsevents/speech/bernanke20090310a.htm.

22. 1940 Investment Company Act, §18(f).

23. Barbara Novick, Rich Hoerner, and Simon Mendelson, Money market funds: Potential capital solutions, BlackRock ViewPoint 1, 4 (Aug. 2011), available at http://www.blackrock.com/corporate/en-se/literature/whitepaper/viewpoint-money-market-funds-potential-capital-solutions.pdf.

24. See Kathryn Judge, The first year: The role of a modern lender of last resort, 17 (Sep. 3, 2015).

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