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Lender of Last Resort: What Have We Learned Since Bagehot?

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Abstract

The maintenance of financial stability is facilitated by well-designed “safety-net” arrangements aimed at limiting the risk of disruption in the financial system (crisis prevention) and the consequences of disruption if it arises (crisis management). An important element of crisis management is the lender of last resort (LOLR) function. This article reviews the main ideas on LOLR reflected in the academic literature, going back to Henry Thornton almost 200 years ago.

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Authors and Affiliations

  1. Pompeu Fabra University, Barcelona

    Xavier Freixas

  2. International Relations Department, Banca d'Italia, Italy

    Curzio Giannini

  3. Regulatory Policy Division, Bank of England, Great Britain

    Glenn Hoggarth & Farouk Soussa

Authors
  1. Xavier Freixas
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  2. Curzio Giannini
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  3. Glenn Hoggarth
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  4. Farouk Soussa
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Freixas, X., Giannini, C., Hoggarth, G. et al. Lender of Last Resort: What Have We Learned Since Bagehot?. Journal of Financial Services Research 18, 63–84 (2000). https://doi.org/10.1023/A:1026527607455

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