A lender of last resort on trial: Remarks on the controversy surrounding the role
	of the European Central Bank in the financial crisis

Detlev Ehrig

A lender of last resort on trial: Remarks on the controversy surrounding the role
of the European Central Bank in the financial crisis

Publication date: 05.12.2016

International Business and Global Economy, 2016, Volume 35/2 , pp. 162-172

https://doi.org/10.4467/23539496IB.16.054.5635

Authors

Download full text

PDF

Titles

Pożyczkodawca ostatniej instancji przed sądem. Uwagi na temat kontrowersyjnej roli Europejskiego Banku Centralnego w kryzysie finansowym

Abstract

The recent European debt crisis has generated a growing importance of the European Central Bank (ECB). The ECB was forced to take measures far beyond its traditional role to stabilize monetary markets and inflation. The ECB has adopted a new function as a lender of last resort, providing banks and governments with almost unlimited liquidity and purchasing government bonds
within Outright Monetary Transactions (OMT). This new role of the ECB has been hotly debated.
In Germany, the debate even reached the Constitutional Court. The article will give a survey of
the fundamentals of a lender of last resort and of the debate referring to the arguments of the ECB
and Bundesbank. It is indeed questionable whether the ECB has a mandate for its new monetary
and nolens volens fiscal role. Regardless of whether the arguments are convincing, new steps towards
new fiscal arrangements and a banking union are needed to stabilize the euro area.

Keywords

European Central Bank, lender of last resort, Outright Monetary Transactions, European fiscal union

References

Information

Information: International Business and Global Economy, 2016, Volume 35/2 , pp. 162-172

DOI: https://doi.org/10.4467/23539496IB.16.054.5635

Article type: Original article

Titles:

Polish:

Pożyczkodawca ostatniej instancji przed sądem. Uwagi na temat kontrowersyjnej roli Europejskiego Banku Centralnego w kryzysie finansowym

English:

A lender of last resort on trial: Remarks on the controversy surrounding the role
of the European Central Bank in the financial crisis

Authors

Detlev Ehrig

University of Bremen

Published at: 05.12.2016

Article status: Open

Licence: None

Percentage share of authors:

Detlev Ehrig (Author) - 100%

Article corrections:

Publication languages:

English

View count: 1668

Number of downloads: 976

<p> A lender of last resort on trial: Remarks on the controversy surrounding the role<br /> of the European Central Bank in the financial crisis</p>

Download xml