Pożyczkodawca ostatniej instancji w strefie euro. Nowa rola Europejskiego Banku Centralnego
Lender of Last Resort in the Euro Area. The New Role of the European Central Bank

Author(s): Ewa Stawasz-Grabowska
Subject(s): Economy, National Economy, Financial Markets, Public Finances
Published by: Wydawnictwo Uniwersytetu Łódzkiego
Keywords: lender of last resort; euro area; European Central Bank; Federal Reserve Bank; International Monetary Fund; EU monetary policy; financial stability; treasury bonds
Summary/Abstract: During the global financial crisis, major central banks of the world undertook a number of actions, including non-standard ones, aimed at the stability of the financial system. In this context, the discussion on the hierarchy of objectives of central banks, in particular on where the responsibility for the stability and safety of the financial system lies, was resumed. This issue has also become of interest to Polish economists. According to the pre-crisis theoretical consensus, the best way in which the central bank could contribute to ensuring financial stability was to maintain price stability. This belief found practical expression in the direct inflation targeting strategy, which since 1990s has been gradually accepted by successive developed countries and then emerging economies. The basic premise of this strategy is the recognition of price stability as the main objective of monetary policy. The central bank applying this strategy may seek to achieve other goals, such as supporting general economic policies of the government, provided that it does not restrict the implementation of the main objective. It should be noted, however, that price stability is not always at the top of the hierarchy of the objectives of central banks. Even in the case of the first central banks, the reason for the founding of the majority of these institutions was the establishment of a lender of last resort (LOLR) to the banking system. The Federal Reserve System, which was established in 1913 in response to recurring periods of panic in the American banking system, is an example. The choice of this particular topic of the book is a result of the following three premises. First, the concept of LOLR is poorly explored and described in the Polish literature. Secondly, arrangements for the LOLR in the euro area tend to be not very transparent. Thirdly, the actions of the ECB during the crisis in the context of the LOLR in the euro area are a current research problem.

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