Developing an EMU Lending of Last Resort Capacity

  • Pierre Schlosser


The European Central Bank arguably saved the euro. To reach this success, the ECB had to expand its task from securing price stability to safeguarding financial stability. This chapter documents how, through strategic yet conditioned interventions, the ECB took temporarily over the controversial role of EMU’s lender of last resort. Driven by a twin concern to safeguard the euro without giving up on its monetary dominance, the institution shaped its institutional environment to ensure that its new responsibility for financial stability would be sufficiently ‘re-insured’ so as to not jeopardize its independence to conduct its monetary policy. As the ECB does not formally possess the lending of last resort function, it had to revert to selected, strategic and timely interventions to exert this new quasi-fiscal authority.


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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Pierre Schlosser
    • 1
  1. 1.European University InstituteFlorenceItaly

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