Central banks need non-bank liquidity ‘toolbox’, says IMF
Fund says central banks should act as lender of last resort to systemically important non-banks
Central banks need to develop better tools for providing emergency liquidity to non-bank financial intermediaries (NBFIs), the International Monetary Fund says.
The fund’s recommendations include granting systemic non-banks access to lender-of-last-resort (LOLR) facilities, an option central banks have historically tended to avoid.
But vulnerabilities among NBFIs – including asset managers, insurers and pension funds – have risen in the past decade. At the same time, non-banks are now “vital
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