Liquidity and the Role of the Lender of Last Resort (Ben Bernanke Keynote Address)
Liquidity and the Role of the Lender of Last Resort (Part 1)
Liquidity and the Role of the Lender of Last Resort (Part 2)
Liquidity and the Role of the Lender of Last Resort (Keynote by Mary Miller)
Liquidity and the Role of the Lender of Last Resort (Part 3)
Liquidity and the Role of the Lender of Last Resort (Keynote by Ben Bernanke)
Liquidity is central to the stability of the financial system. A “run on the bank” can kill even sound institutions if they cannot readily find the cash to cover short-term demands. Further, scrambling to find cash can force some players to sell assets at distressed prices and this, in turn, may trigger insolvencies and failures. A key role of central banks is to be a “lender of last resort” in times of crisis to prevent liquidity problems from triggering a full-fledged financial crisis. A resilient financial system needs rules to ensure financial institutions maintain adequate liquidity and that the central banks provide a backstop for crisis situations.
On April 30, the Initiative on Business and Public Policy at Brookings hosted a day-long event addressing these topics. Many high-level experts from industry, academia, and government came together to consider key issues related to liquidity and the lender of last resort, including: the function and liquidity adequacy of banks; the liquidity coverage ratio, net stable funding ratio, and short-term wholesale funding market reform; liquidity needs in the post-crisis world; and liquidity provision for bank resolution.
Partner - Davis Polk & Wardwell
Resident Scholar - American Enterprise Institute
President, The Clearing House Association; - Executive Vice President and General Counsel, The Clearing House Payments Company
Policy Director - Americans for Financial Reform
Head of Goldman Sachs Global Investment Research - Goldman Sachs
Henry Kaufman Professor of Financial Institutions - Columbia University
Dean Witter Distinguished Professor of Finance and Shanahan Family Faculty Fellow - Stanford Graduate School of Business
Partner - Covington & Burling
BankAmerica Professor of Finance - University of Florida
Senior Executive Vice President and Treasurer - Wells Fargo & Company
Managing Director - JPMorgan Chase & Co.
Principal - Ernst & Young LLP
Deputy Director, Division of Banking Supervision and Regulation - Board of Governors of the Federal Reserve System
[On the shooting of two Indian computer engineers at a Kansas bar allegedly by a 51-year-old US navy veteran] “I don’t think it’s going to be business as usual, at least not for the next couple of years...We’ll certainly have to negotiate a lot of things in a very delicate manner.”