Managing Liquidity in the System: The Bank's Liquidity Insurance Operations - speech by Paul Fisher

In a speech to the Loan Market Association, Paul Fisher - Executive Director Markets and member of the Monetary Policy Committee - describes how the Bank has developed its liquidity operations over the past three years to support financial stability.
Published on 30 September 2010

Paul Fisher begins by explaining that central banks are uniquely placed to provide backstop liquidity to both individual firms and the wider financial system in times of stress. But, he notes, ".in meeting that objective, the Bank must ensure that it guards against moral hazard, by setting the incentives in such a way that discourages anything but exceptional use.and that it adequately protects its own balance sheet from risk of loss".

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