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Full-Text Articles in Economic Policy
Russia: Lombard And Overnight Loans, 1998, Benjamin Hoffner
Russia: Lombard And Overnight Loans, 1998, Benjamin Hoffner
Journal of Financial Crises
On August 17, 1998, following a wave of speculative attacks on domestic ruble assets, the Russian government announced a default on its ruble debt maturing before the end of 1999, and the Central Bank of Russia (CBR) declared a devaluation of the ruble by widening the fixed exchange rate band. The announcements left Russian banks without their main source of collateral—government treasuries—to obtain funds from the CBR’s liquidity facilities. Russia’s payment system and interbank market froze as banks hoarded liquidity and, in some cases, restricted withdrawals in response to depositor runs. To restore liquidity to commercial banks and unfreeze the …
Russia: Central Bank Bonds, 1998, Benjamin Hoffner
Russia: Central Bank Bonds, 1998, Benjamin Hoffner
Journal of Financial Crises
Russian financial markets came to a halt on August 17, 1998, after the Russian government and Central Bank of Russia (CBR) issued a joint statement announcing a ruble devaluation and the suspension of payment on ruble-denominated government treasury bonds maturing before 2000—commonly referred to as “GKO-OFZ” bonds. In September, without a functioning treasury market and with many domestic banks unable to make payments, the CBR began issuing its own short-term, zero-coupon bonds (OBRs) as an alternative financing instrument to provide liquidity in the Russian banking system. OBRs held maximum maturities of three months and the CBR set an upper limit …
Hong Kong: Private Emergency Loans, 1965, Benjamin Hoffner
Hong Kong: Private Emergency Loans, 1965, Benjamin Hoffner
Journal of Financial Crises
In 1965, new prudential regulations and a real estate downturn triggered deposit runs in the British colony of Hong Kong that impacted local Chinese banks with large exposures to unfinished real estate projects and other illiquid assets. As a result of authorities’ laissez-faire approach to the banking system, Hong Kong had no central bank or any other formal lender-of-last-resort (LOLR) policy when the crisis unfolded. Instead, two private British banks, Hong Kong and Shanghai Banking Corporation (HSBC) and Chartered Bank, provided emergency loans at market rates for commercial banks facing deposit withdrawals. Following each bank run, either HSBC or Chartered …