#Central #banks #intervene #market #backstop #paper
Market freezes that drive financial instability should be addressed by a “market backstop principle”, according to new research.
In a paper published in July, the authors – Frederic Boissay and Harald Uhlig – examine the role of central bank reserves during episodes of market dysfunction, such as the freeze in the US asset-backed commercial paper market in 2007–8, the global ‘dash for cash’ in 2020 and the UK gilt market crisis in 2022.
Policy-makers have typically responded to such market freezes
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Financial Stability – centralbanking.com
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