Central Bank Emergency Support to Securities MarketsDarryl King, Luis Brandão-Marques, Kelly Eckhold, Peter Lindner and Diarmuid Murphy No 2017/152, IMF Working Papers from International Monetary Fund Abstract: This paper considers the central bank mandate with respect to financial stability and identifies the links to the functioning of securities markets. It argues that while emergency support to securities markets is an important part of the crisis management response, a high bar should be set for its use. Importantly, it should be used only as part of a comprehensive policy package. The paper considers what types of securities markets may be important for financial stability, what market conditions could trigger emergency support measures, and how programs can be designed to restore market functioning while minimizing moral hazard. Keywords: WP; financial market; market liquidity; money market mutual fund liquidity facility; monetary policy; market making; Lender-of-last resort; liquidity; market maker of last resort; fire sales; financial stability; central bank; mutual fund; price discovery; commercial paper money market mutual fund liquidity facility; market functioning; market condition; securities dealer; ABS market; ABCP market; financing market; Treasury bill market; Securities markets; Securities; Asset liquidity; Financial sector stability; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2017/152 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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