Panel 3: Lender of last resort: who should do what?
Channel: National Bank of Belgium
Date: 2018-11-19

The third panel examines the issue of market liquidity and how to deal with bank runs in
a complex and integrated post-crisis financial system. The occurrence of sudden liquidity shortages in specific market segments are compared with the phenomenon of liquidity dry-outs in the balance sheets of financial intermediaries, especially banks. Against this backdrop, sovereign debt financing in crisis times is discussed, with reference to the bank-sovereign “doom loop”. Finally, panelists share their conclusions on the so-called Bagehot doctrine and its implications for central banks, in particular their independence, their role in the provision of liquidity to markets, and their status in the debate on the centralization of the lender of last resort function.

Chair: 
- Peter Praet (Member of the Executive Board, ECB)
Speakers: 
- Martin Hellwig (Director, Max Planck Institute for Research on Collective Goods), 
- Hyun Song Shin (Economic Adviser and Head of Research, BIS), 
- Jean Tirole (President, Toulouse School of Economics)
Discussants: 
- Elena Carletti (Professor, Bocconi University), 
- Charles Goodhart (Professor, LSE)