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Liquidity Management and Lender-of-Last-Resort Functions: Recent Developments in the Italian Banking System

  • Francesco Cesarini

Abstract

In a paper presented in March 1989 at a meeting held in Perugia in which die instruments for safeguarding the stability of the financial system were debated1,1 expressed the view that, while the functioning of money markets and the precision of tools for monetary control had been greatly ameliorated, paradoxically no significant improvement had been achieved in instruments aimed at direct channelling of lender-of-last- resort funds to banks which experience temporary and intense liquidity stresses. This situation, which appears to be particularly harmful in the case of banks which are submitted to reorganisation procedures under the supervision of regulatory authorities, was to be attributed to the survival of an outdated and rigid legislation governing the eligibility of assets to be acquired by the Bank of Italy as collateral to refinancing operations on a bilateral basis, and it was sharply in contrast with the continuous refinement of the instruments which monetary authorities can negotiate in open markets for purposes of monetary control.

Keywords

Central Bank Monetary Authority Credit Institution Reserve Requirement Individual Bank 
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NOTES

  1. F. Cesarini, ‘Crisi e strumenti di intervento finanziario: il credito di ultima istanza’ in M.T. Cirenei and G.C.De Martin, Il Sistema Creditizio nella Prospettiva del Mercato Unico Europeo, Milano 1990, pp. 141-56.Google Scholar
  2. Banca d’ltalia, Relazione Annuale 1990, p. 165.Google Scholar
  3. Banca d’ltalia, Relazione Annuale 1990, pp. 192-93.Google Scholar
  4. Banca d’ltalia, La Mobilizzazione delta Riserva Obbligatoria: Motivazioni e lmplicazioni, Roma, ottobre 1988.Google Scholar
  5. A. Patarnello, ‘Obiettivi monetari ed aspetti aziendali della nuova anticipazione ordinaria’ in Banche e Banchieri, no. 7-8, luglio- agosto 1985, discusses at length the structure of the current account advance and the impact of the commission fee.Google Scholar
  6. Banca d’ltalia, Relazione Annuale 1990, pp. 4 & 24.Google Scholar
  7. CA. Ciampi, Considerazioni Finali Anno 1990, p. 28.Google Scholar

Copyright information

© Jack Revell 1994

Authors and Affiliations

  • Francesco Cesarini

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