United States: Bank Of America Emergency Liquidity Program, 2009,
2025
YPFS, Yale School of Management
United States: Bank Of America Emergency Liquidity Program, 2009, Vincient Arnold
Journal of Financial Crises
On December 31, 2008, Bank of America (BofA) finalized its acquisition of Merrill Lynch, absorbing losses of $15.5 billion as a result. Regulators were concerned about BofA’s short-term liquidity position and ability to post more collateral if its credit rating was downgraded. On January 16, 2009, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Department of the Treasury announced an interagency support package to BofA, which included an asset guarantee wherein all three agencies shared losses with BofA on a “ring-fenced” $118 billion pool of assets. Under the ring-fencing arrangement, known as the Asset Guarantee Program (AGP), BofA would …
United Kingdom: Northern Rock Emergency Liquidity Program, 2007,
2025
YPFS, Yale School of Management
United Kingdom: Northern Rock Emergency Liquidity Program, 2007, Bailey Decker, Jack French, Eming Shyu
Journal of Financial Crises
Northern Rock plc was a bank in the United Kingdom (UK) that experienced rapid growth from 1998 to 2007. The bank was a large issuer of UK residential mortgage-backed securities. Its funding was primarily wholesale as its retail deposit growth had not kept up with its asset growth. By August 2007, Northern Rock’s credit default swap spreads were widening and its share price falling as conditions deteriorated in the markets on which it relied for short-term funding. To meet the bank’s substantial liquidity needs, the Bank of England (BoE) announced on September 14, 2007, that it would extend an emergency …
United Kingdom: Hbos And Rbs Emergency Liquidity Program, 2008,
2025
YPFS, Yale School of Management
United Kingdom: Hbos And Rbs Emergency Liquidity Program, 2008, Bailey Decker, Jack French
Journal of Financial Crises
Two United Kingdom–based banks, Halifax Bank of Scotland (HBOS) and Royal Bank of Scotland Group (RBS), faced substantial liquidity needs during fall of 2008. To provide funding until recapitalization, the Bank of England (BoE) extended ad hoc emergency liquidity facilities to HBOS on October 1 and to RBS on October 7, 2008, comprising US dollars (USD) and British pounds sterling (GBP). As collateral for the 2008 assistance, HBOS and RBS posted pools of loans that were ineligible for the BoE’s market-wide operations. Aggregate usage of the two ad hoc facilities peaked at GBP 61.5 billion (USD 106.0 billion) on October …
Switzerland: Credit Suisse Emergency Liquidity Program, 2023,
2025
YPFS, Yale School of Management
Switzerland: Credit Suisse Emergency Liquidity Program, 2023, Jack French, Owen Heaphy, Steven Kelly
Journal of Financial Crises
Credit Suisse (CS) faced multiple challenges leading up to March 2023 including a significant outflow of client funds in the fourth quarter of 2022 and reputational loss resulting from a number of scandals in the preceding years. On Wednesday, March 15, 2023, shortly after two high-profile bank failures in the United States, a high-ranking official of the Saudi National Bank, a major shareholder, publicly said it would not provide any more capital for the company. Despite a joint statement from the Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) that CS was in compliance with capital …
Sweden: Carnegie Investment Bank Ab Emergency Liquidity Program, 2008,
2025
YPFS, Yale School of Management
Sweden: Carnegie Investment Bank Ab Emergency Liquidity Program, 2008, Sophia Alden, Jack French
Journal of Financial Crises
In October 2008, Carnegie Investment Bank AB (Carnegie) had trouble obtaining financing amid concerns about its financial health. However, Sweden’s central bank, the Sveriges Riksbank (Riksbank), and the Swedish Financial Supervisory Authority (FSA) still viewed Carnegie as solvent. Between October 27 and 28, the Riksbank lent Carnegie 2.4 billion Swedish kronor (SEK). As collateral for the loan, Carnegie and its holding company, D. Carnegie & Co. AB (D. Carnegie), provided all shares and subsidiaries in Carnegie as well as all shares in a sister subsidiary under D. Carnegie, Max Matthiessen Holding AB (Max Matthiessen). On November 10, 2008, the FSA …
Spain: Caja De Ahorros Castilla–La Mancha Emergency Liquidity Assistance, 2009,
2025
YPFS, Yale School of Management
Spain: Caja De Ahorros Castilla–La Mancha Emergency Liquidity Assistance, 2009, Vincient Arnold, Lakshimi Swaminathan
Journal of Financial Crises
Following years of rapid credit expansion in the real estate sector and reliance on wholesale funding between 2000 and 2008, Caja de Ahorros de Castilla–La Mancha (CCM) found itself on the brink of insolvency in early 2009. Normally, a Eurosystem bank in CCM’s position would turn to the European Central Bank (ECB) to obtain liquidity through its standing financing facilities, but CCM lacked eligible collateral to tap them. Consequently, in February 2009, the Bank of Spain (BoS) provided emergency liquidity assistance (ELA) of EUR 900 million to CCM, secured against CCM assets, to help meet its liquidity needs. In March, …
Russia: Otkritie Emergency Liquidity Program, 2017,
2025
YPFS, Yale School of Management
Russia: Otkritie Emergency Liquidity Program, 2017, Benjamin Hoffner
Journal of Financial Crises
In July and August 2017, Otkritie Bank, Russia’s largest privately owned bank, experienced deposit runs related to concerns over Otkritie’s recent acquisitions, including a large, troubled bank and insurance company. The runs prompted Otkritie to heavily rely on the Central Bank of Russia’s (CBR’s) standing fixed-rate repurchase agreement (repo) facility to meet the outflow. By July, Otkritie had RUB 338.1 billion in outstanding repo loans from the CBR. As depositors continued to withdraw funds in August, the CBR provided Otkritie with an unsecured emergency loan of RUB 330 billion while Otkritie continued to borrow from the repo facility. On August …
Moldova: Consortium Of Banks Emergency Liquidity Program, 2014,
2025
YPFS, Yale School of Management
Moldova: Consortium Of Banks Emergency Liquidity Program, 2014, Vincient Arnold
Journal of Financial Crises
In the fall of 2014, a bank fraud involving illegal loans and transfers resulted in USD 1 billion being stolen from the government of Moldova, which amounted to more than an eighth of Moldova’s GDP. In September 2014, it became clear to the National Bank of Moldova (NBM) that the banks involved in the fraud—Banca de Economii, Banca Sociala, and Unibank—were deeply insolvent and had been hiding that fact from regulators. In late November, the NBM issued 9.4 billion Moldovan lei (MDL; USD 640 million) in emergency credit to the banks at an interest rate of 10 basis points against …
Latvia: Parex Bank Emergency Liquidity Program, 2008,
2025
YPFS, Yale School of Management
Latvia: Parex Bank Emergency Liquidity Program, 2008, Bailey Decker
Journal of Financial Crises
Heading into the Global Financial Crisis, JSC Parex banka was Latvia’s second-largest bank in terms of assets, comprising 13.8% of total assets in the Latvian banking sector. In autumn 2008, Parex faced a capital shortfall owing to massive credit and market losses in addition to liquidity problems and deposit runs of 240 million Latvian lats (LVL; USD 428.6 million). Parex had two senior syndicated loans maturing in February and June 2009, totaling EUR 775 million (USD 992 million). Latvian authorities said they doubted that Parex would be able to pay back, extend, or replace these loans. Authorities intervened at the …
Italy: Banco Ambrosiano Emergency Liquidity Program, 1982,
2025
Pfizer Portfolio & Decision Analysis
Italy: Banco Ambrosiano Emergency Liquidity Program, 1982, Kopal Ardimento
Journal of Financial Crises
On June 14, 1982, prompted by the disappearance of Banco Ambrosiano (BA) CEO Roberto Calvi, the Bank of Italy opened an investigation into BA, which revealed to the market BA’s 1.9 trillion–2.2 trillion Italian lire (ITL; USD 1.4 billion–USD 1.6 billion) in questionable foreign loans. The Treasury Ministry deemed intervention necessary because BA’s collapse would compromise the credibility of the Italian banking system abroad. Attempts to appeal to the Vatican Bank to honor guarantees it had made against these foreign loans failed. The Bank of Italy worried that runs on deposits would further impair BA while authorities explored alternatives to …
Ireland: Anglo Irish Bank Emergency Liquidity Assistance, 2009,
2025
YPFS, Yale School of Management
Ireland: Anglo Irish Bank Emergency Liquidity Assistance, 2009, Salil Gupta, Mahdi Khairallah, Nik Adlina Nik Moktar
Journal of Financial Crises
At the height of the Global Financial Crisis in September 2008, Anglo Irish Bank (Anglo), one of Ireland’s six core banks, specializing in commercial and residential real estate with EUR 101.3 billion in assets, faced severe losses. Irish authorities announced a blanket deposit and liability guarantee for the six banks including Anglo. At the same time, Anglo was offered standby liquidity facilities of EUR 3 billion from the Central Bank of Ireland (CBI) and EUR 10 billion from the two largest Irish commercial banks, which were not drawn on at the time. Anglo was nationalized in January 2009, as deposit …
Indonesia: Bank Century Emergency Liquidity Program, 2008,
2025
YPFS, Yale School of Management
Indonesia: Bank Century Emergency Liquidity Program, 2008, Vincient Arnold
Journal of Financial Crises
By the autumn of 2008, the effects of the Global Financial Crisis of 2007–2009 had struck Indonesia, as liquidity in interbank markets dried up, capital flows reversed, and economic growth slowed. On October 30, 2008, Bank Indonesia—the central bank of Indonesia—passed Regulation No. 10/26/PBI/2008, establishing a Short-Term Funding Facility for Commercial Banks (SFF). On October 31, 2008, the capital adequacy ratio of Bank Century, a relatively small Indonesian bank, was –3.35%. On November 14, 2008, after Bank Century failed to conduct payment clearing the day before, Bank Indonesia approved Bank Century for access to the SFF and began disbursements of …
Iceland: Kaupthing Emergency Liquidity Program, 2008,
2025
YPFS, Yale School of Management
Iceland: Kaupthing Emergency Liquidity Program, 2008, Sophia Alden, Léo Brougher
Journal of Financial Crises
Following the privatization of Iceland’s state-owned banks between 1998 and 2003, the three largest banks in Iceland—Glitnir, Landsbanki, and Kaupthing—grew rapidly, with consolidated assets increasing from 100% of Iceland’s GDP in 2004 to nearly 900% by the end of 2007. Initially, this growth was funded by debt issuances in the European medium-term note market; however, as cracks in the international financial system appeared in 2006, the banks turned to offering high-interest savings accounts through their foreign subsidiaries. Beginning in October 2006, Kaupthing launched “Kaupthing Edge,” an online savings and deposit platform operating in markets outside Iceland. When the United States …
Germany: Ikb Deutsche Industriebank Emergency Liquidity Program, 2008,
2025
University of Chicago Harris School of Public Policy
Germany: Ikb Deutsche Industriebank Emergency Liquidity Program, 2008, Ayodeji George, Sophia Alden
Journal of Financial Crises
In the summer of 2007, IKB Deutsche Industriebank (IKB) faced heavy losses owing to the liquidity support it had provided on commercial paper issued by Rhineland Funding Capital Corporation, its off-balance-sheet vehicle, which held distressed collateralized debt obligations backed by US subprime mortgages. In July 2007, authorities became aware that IKB itself had lost access to liquidity from Deutsche Bank and other funding partners. Publicly owned development bank Kreditanstalt für Wiederaufbau (KfW) held a 38% stake in IKB, exposing it to potentially heavy losses in the event of an IKB failure. KfW, German financial authorities, and German banks pursued a …
Denmark: Roskilde Bank Emergency Liquidity Program, 2008,
2025
YPFS, Yale School of Management
Denmark: Roskilde Bank Emergency Liquidity Program, 2008, Bailey Decker
Journal of Financial Crises
Roskilde Bank A/S (Roskilde) was the eighth-largest bank in Denmark at the time of the Global Financial Crisis, with approximately 43 billion Danish kroner (DKK; USD 9.1 billion) in consolidated assets as of March 2008. Roskilde had considerable exposure to real estate and construction firms, prompting ratings downgrades and larger write-downs than expected in July 2008. On July 10, 2008, Roskilde asked for liquidity assistance from the Danish central bank, Danmarks Nationalbank (DNB). Later that day, DNB and the banking sector’s self-insurance group, the Private Contingency Association (PCA), announced emergency liquidity assistance to Roskilde in the form of an unlimited …
Cyprus: Laiki Bank Ad Hoc Emergency Liquidity Assistance, 2011,
2025
YPFS, Yale School of Management
Cyprus: Laiki Bank Ad Hoc Emergency Liquidity Assistance, 2011, Stella Schaefer-Brown
Journal of Financial Crises
Following the European Union’s decision to restructure Greek debt in October 2011, Laiki Bank’s depositors began to withdraw their funds from the bank in growing numbers after it reported that its portfolio of Greek government bonds had lost EUR 2.3 billion in value. Beginning October 2011 and lasting until the bank’s resolution in 2013, Laiki Bank requested and received emergency liquidity assistance (ELA) from the Central Bank of Cyprus (CBC) so that the bank could continue to fund itself as depositors withdrew their funds. In June 2012, Cypriot authorities recapitalized Laiki Bank, and the government became an 84% shareholder. From …
Canada: Canadian Commercial Bank Emergency Liquidity Program, 1985,
2025
Risk Quantification Division, Office of the Superintendent of Financial Institutions Canada
Canada: Canadian Commercial Bank Emergency Liquidity Program, 1985, Adam Keanie, Léo Brougher
Journal of Financial Crises
In March 1985, the Canadian Commercial Bank (CCB)—Canada’s 10th largest bank, with CAD 2.9 billion in assets—reported to the Office of the Inspector General of Banks (OIGB) and the Bank of Canada (BoC) that CCB would not survive owing to large losses on its United States energy loans portfolio. In response, the BoC assembled an emergency CAD 255 million rescue package, secured through contributions from a consortium composed of the federal government, the provincial government of Alberta, the Canadian Deposit Insurance Corporation, and Canada’s six largest banks. Despite the BoC’s reassurances, including a public announcement promising virtually unlimited liquidity support, …
Ad Hoc Emergency Liquidity Programs In The 21st Century,
2025
YPFS, Yale School of Management
Ad Hoc Emergency Liquidity Programs In The 21st Century, Steven Kelly, Vincient Arnold, Greg Feldberg, Andrew Metrick
Journal of Financial Crises
This paper surveys 22 case studies of 21st century instances when financial crisis-fighters implemented ad hoc emergency liquidity (AHEL) interventions, interventions designed to provide liquidity to a troubled institution that the authorities believe is systemically important. While emergency liquidity support is often introduced with the real or communicated intention of preventing illiquidity from leading to insolvency, the liquidity crisis should instead be viewed as the manifestation of the market’s assessing the firm as nonviable as a going concern. For that reason, authorities should provide AHEL assistance only to institutions that they have deemed viable or that they have committed to …
Brazil: Banco Btg Pactual Emergency Liquidity Program, 2015,
2025
YPFS, Yale School of Management
Brazil: Banco Btg Pactual Emergency Liquidity Program, 2015, Vincient Arnold
Journal of Financial Crises
On November 25, 2015, André Esteves, then CEO of Banco BTG Pactual, a large Brazilian investment bank, was arrested by Brazilian authorities in connection with suspected involvement in a corruption scandal. Although the arrest did not involve BTG in any capacity and Esteves was later acquitted, the company’s stock quickly collapsed and depositors and other creditors rushed to reduce their exposures to the company. Depositors withdrew certificates of bank deposits, which BTG relied on to fund its daily operations. By November 27, BTG shares had fallen 26%. On December 2, the top seven shareholders of BTG took control of the …
Fighting "Fear Itself": The Bank Holiday Of March 1933,
2025
Utah State University
Fighting "Fear Itself": The Bank Holiday Of March 1933, Matthew Jaremski, Gary Richardson, Angela Vossmeyer
Journal of Financial Crises
In the month preceding Franklin Roosevelt’s inauguration, a panic overwhelmed the U.S. banking system. Immediately after assuming office, Roosevelt declared a nationwide bank holiday and vowed to reopen only sound banks. Five days after the holiday ended, nearly 11,000 of the nation's more than 18,000 commercial banks had reopened. Nearly 4,000 never reopened or had to be reorganized. The holiday is often credited with helping reestablish financial stability, but little is known about the mechanisms underlying the reopening process and the way in which payment systems were restored. We detail the process of reopening the banking system using narrative records …
