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Journal Article
Lender of last resort: the concept in history
Humphrey, Thomas M. (1989-03)
Henry Thornton (1760-1815) and Walter Bagehot (1826-1877) laid down a set of rules for stopping banking panics and crises. Known collectively as the classical theory of the lender of last resort, those rule stressed (1) protecting the aggregate money stock, not individual institutions, (2) letting insolvent institutions fail, (3) accommodating sound but temporarily illiquid institutions only, (4) charging penalty rates, (5) requiring good collateral, and (6) preannouncing these conditions in advance of crises so as to remove uncertainty. These precepts continue to inform central bank policy ...
Economic Review , Volume 75 , Issue Mar , Pages 8-16

Journal Article
Financial fragility and the lender of last resort
Schaan, Desiree; Cogley, Timothy (1995)
FRBSF Economic Letter

Conference Paper
Lessons from the crash of '87: systemic issues
Garcia, Gillian (1988)
Proceedings , Paper 188

Journal Article
Lenders of the next-to-last resort: scrip issue in Georgia during the Great Depression
anonymous (1990-09)
Economic Review , Issue Sep , Pages 16-30

Discussion Paper
How Liquidity Standards Can Improve Lending of Last Resort Policies
Santos, João A. C.; Suarez, Javier (2014-04-18)
Prior to the Great Recession, the focus of bank regulation was on bank capital with little consensus about the need for liquidity regulation. This view was in contrast with an existing body of academic research that pointed to inefficiencies in environments with strictly private provision of liquidity, via either interbank markets or credit line agreements. In spite of theoretical results pointing to the possible benefits of liquidity regulation for reducing fire sales in crises or the risk of panics due to coordination failures, a common view was that its costs might exceed its benefits, ...
Liberty Street Economics , Paper 20140418

Conference Paper
Who should act as lender of last resort? an incomplete contracts model
Repullo, Rafael (2000)
Proceedings

Report
Reconciling Bagehot with the Fed's response to September 11
Martin, Antoine (2005-08-01)
The nineteenth-century economist Walter Bagehot maintained that in order to prevent bank panics, a central bank should provide liquidity at a very high rate of interest. However, most of the theoretical literature on liquidity provision suggests that central banks should lend at an interest rate of zero. This latter recommendation is broadly consistent with the Federal Reserve?s behavior in the days following September 11, 2001. This paper shows that Bagehot?s recommendation can be reconciled with the Fed?s policy if one recognizes that Bagehot had in mind a commodity money regime in which ...
Staff Reports , Paper 217

Working Paper
Solvency Runs, Sunspot Runs, and International Bailouts
Spiegel, Mark M. (2001-03-01)
This paper introduces a model of international lender of last resort (ILLR) activity under asymmetric information. The ILLR is unable to distinguish between runs due to debtor insolvency and those which are the result of pure sunspots. Nevertheless, the ILLR can elicit the underlying state of nature from informed creditors by offering terms consistent with generating a separating equilibrium. Achieving the separating equilibrium requires that the ILLR lends to the debtor at sufficiently high rates. This adverse electing problem provides an alternative rationale for Bagehot’s Principle of ...
Working Paper Series , Paper 2001-05

Speech
From Bagehot to Bernanke and Draghi: emergency liquidity, macroprudential supervision and the rediscovery of the lender of last resort function
Baxter, Thomas C. (2013)
Remarks at the Committee on International Monetary Law of the International Law Association Meeting, Madrid, Spain.
Speech , Paper 114

Journal Article
The Federal safety net for commercial banks: pt. I
Furlong, Frederick T.; Keran, Michael W. (1984)
FRBSF Economic Letter

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