LenderoflastresortFunktionen

Lender of last resort (LOLR) functions refer to the ability of a central bank or monetary authority to provide emergency liquidity to financial institutions facing acute, temporary liquidity shortages. The aim is to prevent a disorderly failure of individual banks from triggering a broader systemic crisis. The concept originates from the work of Walter Bagehot, who recommended that in crisis, a central bank should lend freely at a penalty rate against good collateral to solvent institutions so as to restore confidence and maintain the functioning of the financial system.

Primary functions include preventing bank runs by providing liquidity when markets seize up, ensuring credit transmission remains open, and stabilizing financial conditions during crises. The LOLR acts as a lender of last resort to solvent but illiquid banks, not to insolvent firms, and its intervention is typically conditioned on supervisory oversight and collateral requirements.

Common tools include emergency liquidity facilities, standing lending facilities, and, in many systems, a discount window or repurchase operations. Pricing is often above normal rates to discourage frivolous use and to preserve incentives, though central banks may adjust terms during systemic emergencies. Collateral standards are set to manage credit risk and protect taxpayers. Interventions are generally coordinated with bank supervisors, resolution authorities, and, when appropriate, the government.

Limitations and criticisms focus on moral hazard and the potential for rescues to delay necessary restructurings, create risk-taking incentives, or fuel inflation if used excessively. To mitigate these risks, LOLR interventions are usually accompanied by macroprudential measures, clear exit strategies, and strengthened resolution regimes so that banks can be shut down or restructured without resorting to public funds.

Overall, LOLR functions are a pivotal component of financial stability policy, balancing the need to provide immediate liquidity in crises with the long-term objectives of prudent risk management and market discipline.