Central banks are now ‘market makers of last resort’, says Fischer

Stanley Fischer, governor of the Bank of Israel, used a speech on fiscal policy at the International Monetary Fund in Washington this week, to reaffirm his belief that central banks are now viewed as ‘market makers of last resort', in addition to their traditional role as ‘lenders of last resort'. This role became apparent after the Federal Reserve moved to restore liquidity in fixed income and funding markets in the aftermath of the collapse of Lehman Brothers in September 2008.

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