Why might central banks in emerging-market countries find that engaging in a lender-of-last-resort operation might be counterproductive?

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Why might central banks in emerging-market countries find that engaging in a lender-of-last-resort operation might be counterproductive? Does this provide a rationale for having an international lender of last resort like the IMF?

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Financial Markets and Institutions

ISBN: 978-0133423624

8th edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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Question Posted: May 23, 2018 12:49 AM

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Why might central banks in emerging-market countries find that engaging in a lender-of-last-resort operation might be counterproductive?

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Engaging in a lenderoflast resort operation is likely to weaken the credibility of t...View the full answer

Financial Markets and Institutions

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